Category: Investing

CAGR Calculator: My Favorite Financial Calculator

CAGR Calculator — My Favorite Financial Calculator

“Compound interest is the eighth wonder of the world. He who understands it, earns it… he who doesn’t… pays it.” – Albert Einstein

Today I’m sharing my favorite financial calculator with you – the “CAGR Calculator”. CAGR stands for Compounded Annual Growth Rate. Compounded Annual Growth Rate (or CAGR) shows how much a person’s investment grow in one year.

I started using a CAGR Calculator to track the performance of real estate and not stocks. Now I use it for anything and everything related to “Returns” like Stocks, Real Estate, Chit Funds, FDs, Insurance, Mutual Funds, etc. Previously, my favorite financial calculator used to be the Compound interest calculator. It demonstrated the Compound Interest’s magic.

CAGR Calculator

  • You invest in stocks for higher returns, right?
  • And stock markets are for long term, right?
  • But how do you measure your returns?
  • For example, 3 years back, you bought Tata Steel for 300 and today you sold it for 375.
  • That is, 25% returns in 3 years.
  • Optically it looks good. Because its Average Rate of Return = 25/3=8.33.
  • But I would say you earned below FD returns.
  • Because, if you invested Rs. 300 in FD @ 7.50% for 3 years then you would have the same amount of money. That is, Rs. 375.

  • That means, even after risking your money in the stock market… you haven’t even earned FD returns.
  • So the financial tool that I used to calculate the real return is called CAGR calculator.
  • CAGR stands for compounded annual growth rate.
  • CAGR shows how much a person’s investment grew in one year.
  • It is the average returns an investor has earned on the investments after one year.
  • Actually, I ended up using a CAGR Calculator to track the performance of real estate and not stocks.
  • Previously, my favorite financial calculator was Compound interest calculator.
  • That is, its purpose is to demo the Compound Interest’s magic.
  • So many tools are there for CAGR.
  • My favorite is from easycalculation.com.

  • So in Tata Steel’s case CAGR = 7.72%.

  • As you can see, CAGR considers timeframe.
  • 25% in 3 years is absolute return. And it’s the same even if it took 5 years or 10 years.
  • As mentioned, I started using CAGR Calculator for real estate and it immediately became my favorite financial tool.
  • Now I use it for anything and everything related to “Returns”.
  • Whether it’s Stocks, Real Estate, Chit Funds, FDs, Insurance, Mutual Funds, etc.
  • For e.g. You bought a land in 2000 for 10 lacs and sold it for 40 lacs today.

  • You can do the same calc for any asset class. Like Gold, Stocks, Insurance, etc.

Video / Malayalam

I hope you have learned a thing or two from my new video. If so, do share my video with your friends and family on your social media channels!

Happy Investing/Trading! 🙂

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17 Stock Market Lessons From 17 Stocks Over 17 Years

17 Stock Market Lessons From 17 Stocks Over 17 Years

Today I’m sharing 17 stock market lessons that I have learned from 17 stocks over 17 years (oh yeah, this is my first ever YouTube video). I have explained each lesson mentioning the name of the stock that I purchased at that point of time. And yeah, it includes all kinds of stocks: blue chips, large caps, mid caps, small caps, micro-caps, and penny stocks.

  • Today, I’m gonna talk about 17 lessons that I have learned from my stock market experience.
  • 17 lessons are from 17 stocks over a period of 17 years.
  • So I will be explaining mentioning the stocks.
  • In that period, I made profit and loss in almost all kinds of stocks.
  • Blue chips, large caps, mid caps, small caps, microcaps, penny stocks. Everything.
  • I haven’t included every single stock that I have purchased.
  • Instead, included only a handful of stocks that taught me a thing or two.

(more…)

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Important Things About Investing

  • “Investing is not supposed to be easy, and anybody who finds it easy is stupid.”
  • Keynes said the markets can remain irrational longer than you can remain solvent. That’s especially true of leveraged investors. That’s the danger of leverage.
  • In investing, to succeed you must survive.
  • There are two kind of forecasters – one who don’t know, and one who don’t know they don’t know. You must decide which are you.
  • Most investors act as if they can see the future. Either they think they can, or they must, or they try to. In my experience, they can’t.
  • We can make decisions not based on what we think could happen in the future, but based on what’s happening today.
  • The most important choice that any investor can make in the intermediate term is whether to be aggressive or defensive. Not whether it’s stocks or bonds. Not whether is a developed market or an emerging market. But whether it’s a good time to be aggressive, or it’s time to be defensive. And I believe this distinction can be made on the basis of observations regarding the current situation. They do not require guesswork about the future.
  • Superior results do not come from buying high quality assets but from buying assets regardless of quality for less than their worth. That is the most dependable way to achieve success as an investor. And it is essential to understand this difference.
  • There are three stages of a bull market – In the first stage, only a few exceptional people begin to realize that things are improving; In the second stage, most people believe improvement is actually taking place; and In the third stage, everybody thinks that things can only get better.
  • Markets are riskiest when there is a widespread belief there is no risk. This makes investors believe that it’s safe to do risky things.
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