The author contends that annualized returns often understate the variability of performance experienced by investors, with some deviating as much as 54%. He offers instead rates of return stated over rolling time periods-rolling returns. The latter, he proposes, offer a stream of returns, geometrically linked, successive equal period returns, that increase the number of periods available to evaluation performance.  Rolling periods may help identify characteristics of historical performance that are more predictive of future performance.
End the Performance Shell Game and Improve the Evaluation of Investment Performance - Use Rolling Returns