### How Do You Calculate A Cumulative Return?

#### Step 2: Geometrically Link the “Periodic Returns” to Calculate the “Cumulative Return”

##### If we apply the product formula to our series of 5 returns we get 30%.

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## So How Do You Calculate An Annualized Return?

#### Geoff

An outstanding, lucid explanation that clarifies the different methods of calculating the returns on an investment or portfolio.
A must read for any investor who needs to understand the monthly reports from his portfolio manager

#### Derek`

Hi Geoff,

How can I calculate for example 3 month return using a set of monthly returns say I need to calculate for 3 months and 6 months ?

#### Krista

Hi,

Hi Derek,
You would calculate the 3 month cumulative return as (1 + monthly return1) * (1 + monthly return2) * (1 + monthly return3) – 1. Please check out my post below on geometric linking for a more detailed explanation or use the contact form to email me a specific question!

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