Thanks for enlightening me!!!
According to you for all kind of investments (lump sum or SIP) which are less than one year, absolute return is the measure to go with. Correct??
But if I have SIP for past 2 to 11 months then how can absolute return give me correct picture??
Do you want to say that XIRR for SIP of 11 months is not a meaningful measure and only when SIP is for over 12 months XIRR becomes meaningful measure??
I think I understand CAGR and XIRR correctly. According to me both of them makes perfect sense for investment older than one year or under an year.
CAGR is for lump sum investment and XIRR is for SIP or irregular multiple investments in same fund/asset. Irrespective of duration of the investment. You can annualize your returns even when it is for less than a year. Only if you annualize, it will give you clear picture of returns that you may get if you stay put for a year. And then you can compare it with other investment options.