What is the 'Average Annual Growth Rate  AAGR'
The average annual growth rate (AAGR) is the average increase in the value of an individual investment or portfolio over the period of a year. It is calculated by taking the arithmetic mean of the growth rate over two annual periods. The average annual growth rate can be calculated for any investment, but will not include any measure of the investment's overall risk, as measured by its price volatility.
BREAKING DOWN 'Average Annual Growth Rate  AAGR'
For example, if your portfolio grows 10% one year and 20% the next, your AAGR would be 15%. To this end, fluctuations in the portfolio's rate of return between the beginning of the first year and the end of the year are not included in the calculations, which may lead to some measurement error.
To reduce any possible measurement error, an analyst can simply take the average price at the beginning and end of the two measurement periods, and use those average prices to determine each year's return, and then the AAGR.

Average Return
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Yearly Rate Of Return Method
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The average yield on an investment or a portfolio that results ... 
Annual Return
The return an investment provides over a period of time, expressed ... 
Average Price
1. A representative measure of a range of prices that is calculated ...

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Breaking Down The Geometric Mean
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The Most Accurate Way To Gauge Returns: The Compound Annual Growth Rate
The compound annual growth rate, or CAGR for short, represents one of the most accurate ways to calculate and determine returns for individual assets, investment portfolios and anything that ... 
Managing Wealth
Calculating The Means
Learn more about the different ways you can calculate your portfolio's average return. 
Investing
How To Calculate Your Investment Return
How much are your investments actually returning? Find out why the method of calculation matters. 
Trading
Calculating the Arithmetic Mean
The arithmetic mean is the average of a sum of numbers. 
Investing
Calculating Annualized Total Return
The annualized total return is the average return of an investment each year over a given time period. 
Trading
Compound Annual Growth Rate (CAGR)
The compound annual growth rate is an important tool for measuring investment performance and comparing it across asset classes. Discover how it is calculated and how it can inform your investment ... 
Markets
Explaining Growth Rates
Growth rate refers to the amount a specific variable or measure has grown over a specified time, whether related to one company or an entire economy. 
Managing Wealth
Measure Your Portfolio's Performance
Learn three ratios that will help you evaluate your investment returns. 
Managing Wealth
Portfolio Growth Strategies
There are many ways to grow a portfolio, and the best approach for a given investor will depend upon various factors.

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