Investors usually consider the geometric mean a more accurate measure of portfolio performance than the arithmetic mean because it accounts for compounding. Learn more.

The geometric mean is the average of a set of products, the calculation of which is commonly used to determine the performance results of an investment or portfolio.

Eugene Salamin, Computation of $\pi$ Using Arithmetic-Geometric Mean, Mathematics of Computation, Vol. 30, No. 135 (Jul., 1976), pp. 565-570 ...

The simple definition of a mean is that of a numeric quantity which represents the center of a collection of numbers. Here the trick lies in defining the exact type of numeric collection, as beyond… ...