Monotonic vs. cyclical growth
One can argue that a buyer buys at a point in time and sells at another point in time, unconcerned about what transpired in between the two points. Does drawing a line connecting the starting and ending points represent the outcome of his investment? Not exactly. While the line - which is what monotonic growth approximates - simplifies things, it ignores the effect of changing cash flows and the changing relationship between cash flows and value that take place during the holding period. The changing relationship does not affect the investor return during the holding period because they are hypothetical. This relationship only affects return at the point of sale. But changing cash flows are real money and they do affect return.
