Real meaning of CAGR | Compounding DOES NOT EXIST in Stock Market

DEMAT ACCOUNT: link.labourlawadvisor.in/demat
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COURSES: labourlawadvisor.in/link/LPTI
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In this video, we learn about Compounded Annual Growth Rate ( CAGR )
Chapters:
00:00 Introduction
00:15 What happened to my hair?
00:47 Introduction to CAGR
02:57 Absolute returns
04:08 CAGR Example
05:58 Compound Interest Formula
07:08 CAGR calculator
09:08 Cons of CAGR
13:02 When CAGR fails
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CAGR Calculator: labourlawadvisor.in/calculato...
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Newsletter: labourlawadvisor.in/newsletter/
Instagram: / labourlawadvisor
Twitter: / advisorlaborlaw
Telegram: @JoinLLA
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Money-Minded Mandeep:
Instagram / labourlawadvisor
Twitter: / 0mandeep7
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#LLA #cagr #compounding

[@LabourLawAdvisor]

DEMAT ACCOUNT: link.labourlawadvisor.in/demat CAGR Calculator: labourlawadvisor.in/calculators/cagr-calculator/

[@InkSageRavi]

Plz make a video on aditya Birla 1 crore health policy... It is gud or not

[@sourabhyadav5716]

@@zikoiitbhu Exactly! LLA guys please make a video for this question!

[@ElseWhereAbhishek]

As u saved some amount from hair cutting, u can buy some more stocks and those stocks can increase as ur hairs surely 😂 Kindly tell us what stock u picked plzzzzzz

[@rohitsoni9325]

Question: If company is re-investing the earnings and growth in on (actual + reinvested amount) then isn't it compounding in stock market? Eg: A company has 1 manufacturing plant of Rs. 100 producing 10 units. Now, after 1 year, it generates profit of Rs. 100, and instead of giving it out as dividend, company re-invests the amount to build another manufacturing plant of same cost & capacity. So, for first year, company had only 1 plant and producing 10 units and after 2nd year (and reinvesting the profits), company has total 2 manufacturing plants producing 10 units each (so, total 20 units). So, now, whatever profit they have, will be over the units produced by both plant 1 and plant 2. So, profits will be on 20 units instead of original qty of 10 units. So, isn't this compounding in stocks?

[@rohitsoni9325]

@@zikoiitbhu Yes, lot of factors affect stock price but only for a short duration. If we consider in long term, say 10-15 years, then stock price will eventually follow their profits considering they are okay on other parameters like corporate governance and ESG.

[@puneet4ever]

One liner to remember or understand returns Absolute Return: Single investment for Single period CAGR: Single investment for Multiple period XIRR: Multiple investment for Multiple period

[@shree2710]

Wow! Makes much more sense

[@puneet4ever]

@@shree2710 Thanks 🙏

[@s0ulweaver]

What about IRR?

[@rounakpramanick]

@@s0ulweaver watch the xirr and irr video

[@puneet4ever]

@@s0ulweaver both are same except irr calculate the cash flow return on annual basis and xirr calculate the cash flow from actual investment date to convert percentage return annually. So , XIRR is a more accurate way to evaluate an investment.

[@rajeshfit4021]

Please sir make SIP's CAGR return video. It's​ very important for us.

[@RealThingX0]

XIRR hota hay SIP me

[@surajm6236]

@@RealThingX0 it gives kinda wacc or discount rate for npv idk if that is right metric to calculate

[@kuldeepsinghrathore3713]

Mutual fund me b compounding nai milta

[@rajeshfit4021]

@@kuldeepsinghrathore3713 yes

[@pateljay1723]

Ha bilkul

[@viki_sky007]

😂 Cutting hairs you save 3 months of haircut money... best advice from labour law.. aur vese bhi lockdown mein haircut kese hoga 😁

[@RollsRoyce2035]

Use shaver

[@harmannarotta3043]

😂😂😂😂😂😂

[@Sam-rp4hy]

Urbam clap se hoga ...pr q krna

[@Anilkumar-ln6un]

I commented about the CAGR on stocks in one of your previous videos..Thanks for bringing out and sharing this knowledge to everyone so that LLA followers are now jagruk about this concept too.. Really happy to see this video

[@ganeshsonawanemail]

Finally someone saying that returns on stocks and mutual funds are not compunded.

[@Ubj_06]

Yes bro we want that video and your hair looks good no problem 👍🏻👍🏻👍🏻.

[@mystiquenature]

Bahut achha video hai. Concept CAGR ka clear ho gaya. Bdw hair style doesn't matter, it's the mind.

[@itscharlie_]

Shocked & learnt big thing about investing in stock market no one ever said..most worthy information.. 👏

[@nachiketdaithankar4405]

This haircut looks good actually 😎 Also,a video on XIRR and CAGR and calculating CAGR returns on SIP

[@LabourLawAdvisor]

Already made the video on XIRR and published, please watch: kzbin.info/www/bejne/pmSvaYqoo9tnabs

[@mradulbhardwaj4134]

CAGR is just a way to express annual returns in a specific period.

[@shubhambangad1011]

Amazingly explained the CAGR concept. I was looking for a long time for such video

[@preyas]

Hey, came across this and have to say... Very detailed and easy to understand explanation. Needed to understand this very badly. Thanks.

[@kanishksrivastava]

Yes we need a video on SIP interest calculation..

[@sourishchatterjee7284]

Your Hair cut is nice! A quick solution: The return generated from RD(Recurring Fixed Deposit) and SIP returns from Mutual Fund for same investment amount and period be compared to resolve CAGR shortcoming incase of investments made thru SIP

[@bharathbhushan5566]

in that case, u need to calculate IRR for both. calculating CAGR is not a solution

[@sourishchatterjee7284]

@@bharathbhushan5566 thanks

[@lenkarajlaxmi2585]

Kaafi zarurat thi is video ki. Much helpful 👍

[@kas1471]

One of the best and eye opening video for new investors 👍👍👍👍👍👍

[@yourcreed104]

Ye video more than expectation thi, itni detail me logo ke misconceptions and error sab clear kardia, seriously a very good video

[@LabourLawAdvisor]

Thank you so much

[@vivoz1x423]

I already know what is CAGR but still Ill watch this entire video because I like watching your videos

[@vivoz1x423]

@@gameofcharts5404 Number toh khudka daalta bhai. Secondary number se America ka number rakhta hai

[@profheadramnandanprasad9137]

best site to understand cagr

[@MK-uu2et]

You can use HPR/ XIRR to calculate dividend adjusted return.

[@13593d]

Thank goodness somebody finally said it out loud- there is no compounding in stock market! I don't know how many countless websites and youtube videos try to sell the compounding scam to people.

[@Niringoful]

Exactly.. Dumb people. I immediately unfollow such people.

[@blaineprateryourrealtor7517]

Yes there is compound interest, but on in certain underlinings such as BAC where the increase their dividends pretty much each year.

[@InvestBeast]

great information for every beginners. such a freaking awesome video.

[@ramnaslai2980]

I knew about the CAGR...but still I wanted to see your video and learned some more things...thank you...in short hair also you are looking cool.

[@allaboutfinance8288]

Wonderful explanation and thank you for making it easier by providing calculator😁. All the very best 👍

[@pran10000]

It requires a certain level of maturity to say what is true while rest of youtube is misselling power of compounding.

[@rajeshfit4021]

Exactly Same question has come in my mind, that stock market, mutual fund etc.. don't given​ the fixed compound interest.some times return are going very high(80%) and low(-40%).

[@chillndie]

stock market is a game of holding and timing of withdrawal. zitne high time pe paisa nikal paoge utna hi return generate hoga

[@shanudamian]

Great content. The language and way of explaining makes it easy to understand

[@DSCMPINDIA]

Sensible person with sensible video.

[@mohdsami9870]

I always love your efforts to educate the people like us. Sir I highly request you to please make a detailed video onTata ethical fund.

[@tuhinkarmakarrr]

Thanks for making this video. I would like to mention 2 points here. First, CAGR is not equal to average return. And secondly, compounding effect does exist in stocks and mutual funds when the dividend is reinvested. That way you can earn "interest" (gain or dividend) on "interest" (original dividend).

[@prakash_user3290]

Confusion statement,consider revision

[@nilanjanmukhopadhyay8369]

Confusing statement

[@suryapratap3814]

This is the buzz cut! And u are looking great! Very few people have it in them to carry this look. And you re nailing it! I personally do this once in a year. Brad Pitt, Zayn, Akshay Kumar, Tom Hardy, Beckham have carried this look at least once.

[@mukesh157]

For monthly SIPs , make n as number of months. That's how I calculate As CAGR is annual number, divide it by 12 to get Monthly number, for calculations using Compound interest formula

[@LabourLawAdvisor]

Already made the video on XIRR and published, please watch: kzbin.info/www/bejne/pmSvaYqoo9tnabs

[@abhishekmittal2185]

You are awesome mandeep!!! You explain so complicated topics so easily. And by the way watching youtube videos also takes a lot of effort BECUASE there are tons of useless videos that try to distract you from gaining knowledge and wasting your time

[@AdinathBirajdar07]

You can use (n-1) for number of years like 7-1=6 number of years 😄 Thank you sir for fantastic explanation

[@sach219]

Great video!! Top notch explanation for a 22 year old beginner like me!

[@Aristotlein21stcentury]

i always like your videos. just thinking, people who are watching his video and want to know about CAGR, probably already have Dmat account.

[@chetanakarte6449]

Yes, we want video on how to calculate interests on Mutual fund SiP.. Your short hair looks awesome..

[@chetansp912]

Very informative video sir.. as asked by many others as well, love to know what's the way to calculate SIP CAGR value..

[@manojbhatt687]

good work sir, we easily getting knowledge , your physical gesture and body language are perfectly match while understand

[@theawesomedas]

Thank you so much aapne ekdum se concept clear karr Diya ❤️❤️❤️❤️❤️

[@kalpeshkundanani3024]

Very informative, will be waiting for the SIP equivalent... :)

[@RahulSharma-tr4me]

bohoot bdiya aaj he search kar raha tha aur jaisa he yeah video aayi toh laga ki aapko kaisa pata chala😎👍

[@LabourLawAdvisor]

Haha

[@sayjal2499]

Thank you so much for such an easy explanation!!

[@emmy131900]

Every KZbin finance guru is talking about compounding in stock market..I use to wonder how? Thank god I saw this video. Please educate yourself and don’t follow anyone blindly if they throw some fancy words like compounding. In stock market compounding never works on stock but on the company if it’s growing consistently. Thank u Mandeep for this nice video.

[@Abhi65707]

Make video for SIP also..

[@DrAmanKapoor]

Thanks for this explanation . I was easy to Digest 😅.. Appreciate how you have simplified the topic ...and showed the rationale behind it

[@sonalisignapurkar6906]

knowledge to the point.. thank you,, great efforts

[@alternateamountking4153]

Awsome it teach me a very good lesson of my investment journey

[@microtech2448]

That's what I wanted answer for long time and have been discussing with friends as well that how SIP calculators show crores of corpus while end result depends on nav at time of units redemption because you might have purchased units constantly at 100 rs for 10 years and at time of redemption its nav is 50, then total worth would be half so where is compounding here. This video explains things very well.. Thanks!

[@chillndie]

i think returns are mostly dependent on timing of withdrawal.

[@uditagnihotry8149]

If MF & Stocks doesn't do compounding then which all instruments do, and which one is the best out of them?

[@rajanchauhan8140]

Thanks a lot Bro Very helpful and informative 😇 & Also want The SIP return method 👍🙏

[@LabourLawAdvisor]

Already made the video on XIRR and published, please watch: kzbin.info/www/bejne/pmSvaYqoo9tnabs

[@rampsrocks7955]

Love you all guys The way you put up things really love it.

[@udyan9571]

Really nice video something new to learn great 👍👌👍 Need more videos on fundamental investing and more podcast

[@kaustavdutta4]

So next video is on XIRR ;)

[@LabourLawAdvisor]

Already made the video on XIRR and published, please watch: kzbin.info/www/bejne/pmSvaYqoo9tnabs

[@soumyadipchakraborty1664]

I want to know for that sip plan, how to calculate. By the way this video is also good❤️

[@phaneshtalapula1044]

Just awesome.... Please make the other video as discussed. It's an eye opener that compounding doesn't work in stock market where all the experts keep insisting heavily on compounding in mutual funds...

[@LabourLawAdvisor]

Already made the video on XIRR and published, please watch: kzbin.info/www/bejne/pmSvaYqoo9tnabs

[@romu44444]

All your videos are so smooth and easy to understand. Hence no one feel boar..

[@LabourLawAdvisor]

Glad to hear that

[@shashankaryaofficial]

Excellent video. When I started learning about the stock market, I realized the same thing. Compounding doesn't exist in stock market, people who say power of compounding is used are making false claims. But I also figured out that if we talk about % returns people tend to forget that % is relative, and that's why the returns are called compounded returns.

[@overthink17]

Bhai fir compound ka benefit kidr se uthayein!????

[@gopalsarda2158]

Amazing Video! I was clear about cagr but didn't know that second wala part wala.. I was thinking compounding interest is mutual fund badhta hai.. Very informative 👌

[@Azeem08331]

I was also thinking so many people say compound interest in mutual fund? So it's worng

[@gopalsarda2158]

@@Azeem08331 yes!! XIRR is what it is for us! 😅 Next video will be for it

[@LabourLawAdvisor]

Already made the video on XIRR and published, please watch: kzbin.info/www/bejne/pmSvaYqoo9tnabs

[@pradipmukherjee5726]

Very easily described and indepth info. Thanks!!

[@LabourLawAdvisor]

Glad you enjoyed it!

[@xyzok4891]

Yes bro dusra vala concept v chahiye 👍👍

[@joukhadanahaiukhaadle]

Please bana dijiye video SIP ke returns varify karane ke tarike par bhi. I had been already looking for it. Besides , it's always a treat to watch you ... hair or no hair :-P

[@LabourLawAdvisor]

Hehe thanks, coming up

[@sayandeepjana2987]

Good and informative video, need video for SIP calculation..

[@LabourLawAdvisor]

Already made the video on XIRR and published, please watch: kzbin.info/www/bejne/pmSvaYqoo9tnabs

[@nikhilpanchal7332]

thankyou so much LLA for providing such valuable knowledge

[@vikastulsi]

thanks for mentioning the fact that there is no Compounding in Stock. I used to always think when people claim so.

[@shivsagarbishnoi9122]

Sir you are looking really really handsome in this haircut...😍😍😇🤠...and video is very informative and helpful...🙂

[@LabourLawAdvisor]

So nice of you

[@KaranTandonAnkkie]

Yeah, do make a video for SIP return calculation in percentage 👍

[@LabourLawAdvisor]

Already made the video on XIRR and published, please watch: kzbin.info/www/bejne/pmSvaYqoo9tnabs

[@KrishnaKumarAlpha]

Mandeep bhai aapke video bhi mast Content bhi ek number aur hair style bhi

[@MrSoup1991]

How do we calculate CAGR for multiple buying points for a particular stock? Generally we keep on investing for years in good stocks and we buy on dips (long term investor).

[@swapnil0708]

Nice, Informative Video

[@LabourLawAdvisor]

Thanks

[@yashdesigners]

Really worth it to see your videos

[@pankajattri4875]

Very good explanation.really want to see ur next video for SIP RETURNS

[@saurabhgupta5429]

Thanks for your video. Also, make a video on SIP CAGR

[@LabourLawAdvisor]

Already made the video on XIRR and published, please watch: kzbin.info/www/bejne/pmSvaYqoo9tnabs

[@sourabhyadav5716]

Awesome knowledge! I have never heard someone clearly mentioning that Power of Compounding never works in Stocks n MFs! Thanks for clearly explaining the same! Follow up question: But if Power of Compounding does not exists in Equity or MF they how are they better than FDs or PPFs? Can you share some example or create a video or point out a video which explains the same? How do you calculate CAGR for SIPs? Best financial video channel ever! Kudos to LLA!🎉🎉🎉

[@LabourLawAdvisor]

900 can become 2000, with or without the mathematical compounding. I showed both examples, stocks will just have volatility but will reach their goal

[@ronit351]

Theoretically compounding is not exist in equity but in long term u can see the results of compounding. Watch this vid-kzbin.info/www/bejne/maDWm6eZjN6Koqs

[@anukoolthapa]

​@@ronit351 bro i again watched this video by Ankur and I'm still not convinced that compounding happens in Stock market.. we all are (have been till yet) just naming the upward volatility of equity market(India's Economy) as the growth happened due to compounding.

[@ronit351]

@@anukoolthapa See main aim is return compared to all other things in stocks we can achieve more so we can assume that we have compounding effect in long term actually there is no compounding in stock.

[@abhibaakihai6742]

Increase your sip investment 10 present yearly

[@CHChandanMansani]

Superb Sir Really beautiful explanation

[@anandakrishnanp6579]

Great video..really understood what cagr actually is! Plz do make a video on SIP rate calculation too

[@aayushsolanki1357]

Yes please make a video for Sip for find the annual return...

[@aayushsolanki1357]

Thanks for the video so early in an expected...😉😉😉

[@LabourLawAdvisor]

Already made the video on XIRR and published, please watch: kzbin.info/www/bejne/pmSvaYqoo9tnabs

[@rangalajnanee8266]

We want our Mandeep always ❤️

[@sattysattu]

The answer is IRR. and ye calcs to excel mein bhi ho sakte hain, easily.

[@vikramgupta8936]

all time watching video is like fun and making finance easy for a non finance person like me , video is really useful. please make one more video for CAGR of mutual funds thats very much required.

[@LabourLawAdvisor]

Already made the video on XIRR and published, please watch: kzbin.info/www/bejne/pmSvaYqoo9tnabs

[@yogensood8293]

Yes please, make a video on XIRR! (SIP's ka CAGR)

[@LabourLawAdvisor]

Already made the video on XIRR and published, please watch: kzbin.info/www/bejne/pmSvaYqoo9tnabs

[@sachiniyer7148]

SIP CAGR video please.. I want to calculate returns in SIP vs one tone. Will help a lot

[@LabourLawAdvisor]

Already made the video on XIRR and published, please watch: kzbin.info/www/bejne/pmSvaYqoo9tnabs

[@rakeshkr86]

Informative and easy to understand

[@adamshafijainushaik1030]

Very informative video.... keep sharing knowledge

[@soumitrochowdhruy]

Please bring the video for SIP 😭

[@stephanmedi6597]

Watch video of CA Rachana Ranade called XIRR/IRR

[@LabourLawAdvisor]

Already made the video on XIRR and published, please watch: kzbin.info/www/bejne/pmSvaYqoo9tnabs

[@soumyabanerjee7746]

Yes please make this video what you ware taking about .

[@pravatkumardas9275]

Quite educative and useful video

[@techppnodia7908]

I have a small question about MutualFunds: I know that SIP is better than Lumpsum as it will invest periodically. But if some time i miss one month sip for any reason, then i will have to pay fine for it. But my question is, can i choose to pay my specific amount (let's say 5000, which i was doing before as sip monthly) as lumpsum every month. so that if i skip one month out of 12 months, I won't have to pay fine for it and my investment will be also periodic. Can i do like this?

[@dhirajchand3659]

Which fine u r talking about. No such fine exist sir

[@prajaktathakaar4601]

Thank you so much Mandeep, because of your videos, I can understand the concepts in finance and put my money to good use in lockdown. All my good wishes 🙏 PS Don't worry about looks, people like you should bring back the era of content above showcasing.

[@LabourLawAdvisor]

Thanks so much ❤️

[@rishabhpateel1927]

Yes, want video on Sip Returns!✌️

[@NIVK94]

Amazing Videos. Thanks for guiding us.❤️

[@LabourLawAdvisor]

Glad you like them!

[@Tausifsiddiqui]

Dude, I (engineer) was explaining to My financial advisor (finance guy) that compounding doesn’t exist in stocks and MF and Crypto. But he just didn’t understand and kept explaining me that it works using percentages (absolute). What the hell thank you for this video now! Urgh. Hope your channel reach the success you deserve man.

[@Tausifsiddiqui]

I wonder why so many websites have this bait titles about compounding in MF.

[@reechasinha2634]

Very nice sir... Kindly make the next video Plzz... U r looking super cool

[@zaidqureshi270]

Bro good videos you made it so simple to understand.

[@shorttravelvlogs]

Please provide a link to Calculators in your homepage. I could not find it anywhere 🥺

[@LabourLawAdvisor]

It's the third link in the description

[@LabourLawAdvisor]

Tomorrow I'll add on the homepage too

[@RealThingX0]

4:40 Ye Reliance ka share hay kya? 😅

[@LabourLawAdvisor]

Haha nahi

[@ShamimAhmadshamimseo]

Thank u sir, I got my answer here. Most channels are talking about compounding in stock, but how compounding are working no body clearifying. How ₹1000 will make ₹1crore in 30 years. May be after 30 years stock price will same. I think Only through bonus it will make money

[@prakharmohankaushik3620]

yeah. surely make a video on how to calculate average returns on SIP. 🙌🙌

[@surajthapa4160]

Ab aapko lambe samay tak kisi barber ke contact me aane ki jarurat nhi😅 to aap bhi safe and wo barber bhi... 😁

[@LabourLawAdvisor]

Haha

[@patriot0074]

Achcha to isi liye bhaisab ne itne dino se video upload nhi kiya tha.... 🤣🤣😂

[@LabourLawAdvisor]

Haha