I have bought shares at following times:

    Buy - 5th March 2006 - Price > $ 70 - Quantity - 10
    Buy - 2nd May 2007 -   Price > $ 33.5 - Quantity - 100
    Buy - 1st Oct 2008 -   Price > $ 57.7 - Quantity - 17
    Buy - 5th Jan 2012 -   Price > $ 94.8 - Quantity - 27

Assuming current share price to be $ 100, how can I find CAGR (cumulative) for the total investment I made till now?

PS: Sorry but I am unable to format this. Adding two spaces does not seem to add line breaks.

  • 1
    $\begingroup$ What's CAGR and what's Qty? $\endgroup$ – Rudy the Reindeer Apr 8 '12 at 6:40
  • 1
    $\begingroup$ And is the mathematica tag correct? $\endgroup$ – Rudy the Reindeer Apr 8 '12 at 6:44
  • $\begingroup$ Yes Mathematica tag is correct. Here is what CAGR is:en.wikipedia.org/wiki/Compound_annual_growth_rate $\endgroup$ – meetpd Apr 8 '12 at 12:56
  • $\begingroup$ Qty is quantity $\endgroup$ – meetpd Apr 8 '12 at 12:57
  • $\begingroup$ A better question might be, why exactly did you tag it Mathematica? Because, I think it's probably not a correct tag. So, can you explain why you think it is? $\endgroup$ – Graphth Apr 9 '12 at 13:15

If you had made just one investment, calculating the CAGR is not hard. Say you bought it for 100, held it 30 months (or 5/2 years), and sold it for 200. r, the CAGR, would be found by solving $100(1+r)^{\frac 52}=200$, which gives $1+r=2^{\frac 25}\approx 1.32$, so the CAGR is about 32%. If you have multiple buys (and even multiple sales) you want a common $r$ that makes it come out. Say you bought some for 100 at day 0, some more for 200 18 months later, it is now 42 months in (7/2 years) and worth 500. The first batch has been compounding for 7/2 years, the second for 2, so we solve $100(1+r)^{\frac 72}+200(1+r)^2=500$. Usually you cannot solve for $r$ algebraically, you have to do it numerically. Excel has the function IRR for this. I get $r \approx 0.222$ in this example. If you have sales along the way, just enter them as negative investments. If you do, there may be more than one value of $r$ that satisfies the equation.


Your stock portfolio works just like a mini-fund.

You define an initial amount of money (Assets Under Management, AUM) equal to the 1st position (Price*Qty). Your NAV is 100. The gains on your position would be your returns, until you add a new position.

Each time you add your position, your AUM sees capital inflows. The gains on all the positions open would be spread over a bigger AUM in the return calculation.

The returns for the periods determine the evolution of your NAV. The CAGR over a chosen time window is just the standard CAGR formula applied to NAV(t-1), NAV(t).

Hope this helps understand the general idea.

  • $\begingroup$ Thank you for your answer. But can you please explain me with an example. I am little dumb in these things. Thanks! $\endgroup$ – meetpd Apr 14 '12 at 4:02
  • $\begingroup$ I am sorry, I do not have enough reputation to post a printout of the answer. $\endgroup$ – IcannotFixThis Apr 16 '12 at 9:06
  • $\begingroup$ Can you send me email? send it to succeedebay@gmail.com..Thanks! $\endgroup$ – meetpd Apr 16 '12 at 15:50

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.