See Compound Annual Growth Rate

Compound Annual Growth Rate
The Compound Annual Growth Rate (CAGR) is the growth rate that gets you from your start value to your end value, measured over n years, and assuming that the investment has been compounding over the given time period.

The CAGR formula is:

CAGR = (End Value/Start Value)^(1/Years)-1


Let’s say an initial investment grows from $10,000 to $11,200 in two years time. The Compound Annual Growth Rate can be calculated as follows:

CAGR = (11,200/10,000)^(1/2)-1 = 0.0583 = 5.83%

It is theoretically possible that the return over the initial investment was 40% over the first year, and -20% over the second year. This case demonstrates why the CAGR is a better measure of return over time than the Average Annual Return (a common measure for mutual funds): the AAR doesn’t accurately estimate the growth of an investment as it ignores the effects of compounding. In this case, the Average Annual Return would be calculated as (40-20)/2 = 10%, which is clearly an overestimation of the real (geometric average) annual growth rate of 5.83% as represented by the CAGR.

Compound Return
This is the percentage that stands for the cumulative effect, over a period of time, of a series of gains or losses on a start capital. Usually the compound return is expressed in annual terms. This means that the percentage of the compound return stands for the annualized rate at which the start capital has compounded over the given period. The compound return, expressed in annual terms, is also known as “Compound Annual Growth Rate” (CAGR). So if you start with an investment of $10,000 and it grows to an amount of $20,736 in 4 years time, the compound annual growth rate is 20% ($10,000 * 1.2 * 1.2 * 1.2 * 1.2).

An ETF looks like a stock, and trades like a stock, but isn’t. ETF stands for “Exchange-traded Fund”. It is a security that can be bought and sold, which tracks (follows) an underlying index, such as a major index like NASDAQ, S&P 500 or Dow, which it aims to replicate.

Stock in portfolio at the start of the trading day.

Quarter To Date. It refers to the period beginning the first day of the current quarter up to the current date.

Return Since Start. It is the return from the start date of the investment up to the current date.

Sharpe ratio
The Sharpe ratio is a way to examine the performance of an investment by adjusting for its risk. It is calculated by dividing the excess average return of an asset through its standard deviation. Generally, the greater the value of the Sharpe ratio, the more attractive the risk-adjusted return. A Sharpe ratio of 1 is considered to be good, a Sharpe ratio of 2 very good.

Swing trading
Investors can be globally divided into three groups: day traders, swing traders, and buy-and-hold investors. Day traders buy and sell stocks every trading day. Buy-and-hold investors are long-term traders: they buy stocks and hold them for a long period of time. They are not bothered by drawbacks along the way, since the long-term trend is usually upward (in case of a well-chosen portfolio). Swing traders are in between these two categories, when it comes to their trading frequency: they hold onto their positions for at least one, but typically for several days or even weeks, in order to take profit from price changes (‘swings’). What System falls into the category of swing traders.

To Be Announced. This usually concerns data that are not yet available (as in: before markets open).

Value of position at the start of the trading day.

Year To Date. It refers to the period beginning the first day of the current calendar year up to the current date.