[fallingfrog]

Correct, because we're averaging together things that are multiplied, not things that are added. Arithmetic mean is rather meaningless here.

[getToTheChopin]

The arithmetic mean gives you a sense of the return you can expect by investing in the market for a single year.

When investing over multi-year periods, the geometric average is more relevant.

You can see the impact on this chart, where the average return (and volatility) drops over longer time periods: https://themeasureofaplan.com/wp-content/uploads/2023/01/Rol...