CAGR Calculator — Compound Annual Growth Rate for Traders

CAGR (Compound Annual Growth Rate) is the annualized return that would produce your actual account growth if applied consistently each year. Traders use it to measure long-term performance, compare strategies over different time periods, and benchmark against indices like the S&P 500 (historically ~10% CAGR). It eliminates the distortion of volatile year-to-year returns.

The S&P 500 returns roughly 10% CAGR long-term. Professional fund managers who beat 15% CAGR consistently are considered excellent. Retail traders with 20–30% CAGR are doing very well. CAGRs above 50% are possible short-term but rarely sustainable. Be cautious of anyone claiming 100%+ CAGR over multiple years — it almost always involves either extreme risk or unverified results.

Average return adds up yearly returns and divides by years. CAGR compounds them. A trader who gains 100% in year 1 and loses 50% in year 2 has an average return of 25% — but actually breaks even (CAGR = 0%). CAGR reflects real account growth; average return can be misleading.

Yes — if your ending balance is less than your starting balance, CAGR is negative. A trader who started with $20,000 and ended with $15,000 over 2 years has a CAGR of −13.4%. Negative CAGR is important to know — it means the strategy is destroying capital at that annual rate.

Warren Buffett averages ~20% CAGR. The S&P 500 averages ~10% CAGR. For active traders: 30–50% CAGR is achievable with disciplined risk management. 50–100% CAGR is possible but requires taking on more risk. Any trading strategy claiming 200%+ CAGR consistently is likely either unsustainable, unverified, or involves extreme leverage. Use this calculator to set realistic multi-year compounding goals.