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What is a good CAGR? Benchmarks from 98 years of returns

By the CAGR Calculator team · Published

Quick answer

A good CAGR is one that beats the right benchmark for the risk taken. For a stock portfolio the reference point is the market: the S&P 500 compounded at 10.02% a year from 1928 to 2025 (about 6.8% after inflation). For bonds, 4–6% is typical; for cash, 3–4%. Anything above inflation means your money grew in real terms.

US stocks, 1928–2025
10.02% a year
US 10-year bonds, 1928–2025
4.54% a year
Cash (T-bills), 1928–2025
3.37% a year
US inflation, long run
About 3% a year
Data
NYU Stern (A. Damodaran), annual returns 1928–2025

Long-run CAGR by asset class

The table below compounds each asset’s annual returns from Aswath Damodaran’s widely cited NYU Stern dataset. Each figure is a true CAGR (geometric mean), not an average of yearly returns.

Asset (US)CAGR 1928–2025CAGR 2016–2025
US stocks (S&P 500, dividends reinvested)10.02%14.68%
Baa corporate bonds6.63%4.29%
Gold5.61%15.14%
US 10-year Treasury bonds4.54%0.94%
US real estate (home prices)4.20%6.49%
3-month Treasury bills (cash)3.37%2.23%

Two lessons stand out. First, over 98 years, the asset with the highest volatility — stocks — also delivered the highest CAGR: $100 invested at the start of 1928 grew to about $1.16 million by the end of 2025, against $7,753 in Treasury bonds and $2,578 in bills. Second, a single decade can look nothing like the long run: Treasury bonds returned under 1% a year from 2016 to 2025 after the 2022 rate shock, while gold’s CAGR nearly tripled its long-run figure.

Nominal vs real: subtract inflation first

Every number above is nominal. US consumer prices rose about 3% a year over the same period, so the S&P 500’s real CAGR is (1.1002 ÷ 1.0304) − 1 ≈ 6.8%, and cash barely kept pace with prices. A 7% CAGR during years of 6% inflation is almost no real growth. Enter the inflation rate for your own country and years in theCAGR calculator to see your real CAGR.

Small differences compound into large ones

On $10,000 held for 30 years:

CAGRValue after 30 years
7%$76,123
10%$174,494

Three percentage points a year more than doubles the outcome. That is why fees of 1–2% a year matter so much, and why a “good” CAGR should always be judged after costs.

How to judge your own CAGR

  1. Pick the matching benchmark. Compare a stock fund to a stock index, a bond fund to a bond index — not a bond fund to the S&P 500.
  2. Use the same dates. CAGR is very sensitive to start and end points. A portfolio started at a market bottom will flatter any manager.
  3. Adjust for risk. A 9% CAGR with a 15% worst drawdown may be better for you than 11% with a 50% drawdown. Check year-by-year swings in the calculator’s Yearly data tab.
  4. Check cash flows. If you added money over time, CAGR is the wrong measure — use XIRR.
  5. Think in real terms. Beating inflation is the minimum; beating a low-cost index fund is what justifies extra risk or effort.

Good CAGR for a business

Company growth has no single benchmark, but common rules of thumb are: 8–12% revenue CAGR sustained over five years is healthy for a large established firm, 15–20% is strong for a mid-sized one, and young companies often exceed 25% from a small base. Look for consistency — revenue, profit and cash-flow CAGRs moving together — rather than one spectacular year. See how tocalculate revenue CAGR correctly.

Raising your portfolio’s CAGR

Over decades, the biggest driver of a portfolio’s CAGR is its mix of stocks, bonds and cash, followed by costs and staying invested. More stocks usually means a higher CAGR with deeper drawdowns; a 60/40 stock–bond portfolio trades some growth for stability. To see what a target CAGR means in money, try the reverse CAGR calculator.

Sources and further reading

Educational information only — not investment advice. Past performance does not guarantee future results.

Related questions

Is a 10% CAGR good?

For a diversified stock portfolio, 10% a year is roughly the long-run US market average — the S&P 500 compounded at 10.02% a year from 1928 to 2025. It is excellent for bonds or cash and modest for a small, fast-growing company’s revenue.

Is a 15% CAGR good?

Sustained for ten years or more, 15% is well above the long-run stock-market average and roughly quadruples money in a decade. Treat it as exceptional rather than a planning assumption; the S&P 500 only managed about 14.7% a year in the strong 2016–2025 decade.

What CAGR should I assume for retirement planning?

Planners typically use a real (after-inflation) rate rather than a nominal one, often in the 4–6% range for a stock-heavy portfolio and lower for a balanced one. Test several rates with the reverse CAGR calculator instead of relying on one number.

What is a good revenue CAGR for a company?

As a rule of thumb, 8–12% sustained over five years is healthy for a large established company, 15–20% is strong for a mid-sized one, and early-stage companies often grow above 25%. Compare against industry peers and check that profit grows too.

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