Explain the example in your own words and check the calculation.
The mean is the sum of the values divided by their count; the median is the middle value in a sorted series.
The mean is affected by extreme values. A sample is the group that was measured, and not necessarily the whole population. When site participants choose to participate voluntarily, that is not a representative sample. Popularity is not proof that a product is worth investing in.
For returns of 0%, 0%, 0%, 0%, 100%, the mean is 20% and the median is 0%. The single number “20%” does not tell the whole story.
Explain the example in your own words and check the calculation.
For five observations—2, 3, 3, 4 and 18—the mean is 6 but the median is 3. The large observation pulls up the mean without making most observations large. When reading an “average result,” ask how many observations were collected, who was included and whether there are outliers. Plotting all the points can reveal information that a single summary number hides.
Concepts that help you compare
Average return is not a promise
A historical average describes a certain period; it is not a commitment to a future outcome. Two investments with the same average can experience different swings. Correlation describes joint movement and does not prove causation. Choosing the start and end dates changes the return you show.
Comparison example: One year +50% and the next year −50%: 100 becomes 150 and then 75. The arithmetic average is 0%, but in reality there is a 25% loss.
A chart displays data. Check what is measured, the units and the period before drawing conclusions. Start with the title and source. A time axis may show days, months or years; the vertical axis may show price, percentage change or portfolio value. Read axis labels rather than assuming time follows the language direction. Lines show change over time; bars compare amounts; a candle shows open, close, high and low. Green alone is not enough information. Time range and scale change how dramatic movements look: an axis starting at 99 can exaggerate a move from 100 to 101, which is still 1%. Compare the same period and currency, and distinguish price charts from total return including dividends and costs. Past data is not a forecast or a trading instruction.
Comparison example: Practice data for five days: 100, 110, 99, 105, 108. The total increase is 8%. From day 2 to 3, the drop is 10%: 11 divided by 110. A 10% rise followed by a 10% fall turns 100 into 99, not 100.