The interactive charting tools are my own homemade creations for backtesting portfolios. I originally started making them to study my own investments, but I quickly realized that they could be scaled to study any combination of assets. I also believe that other investors may find the information useful, so I’m happy to share my work. Here’s how to use the Portfolio Charts tools to model your own personal asset allocation.
Calculator Inputs
Each chart contains a wide variety of information including both user inputs and chart outputs. As a general rule, any field you see in black is a user input. There are asset allocation inputs that control the portfolio for every chart, and individual inputs that control settings unique to a specific chart.
When you change an input, the charts will automatically update on-the-fly. There’s no “calculate” button. So if you see something that looks like an input, try changing it and see what happens. And if you ever need to reset the inputs, just refresh your browser to start over.
Asset Allocation Settings
The primary interface for every chart is the asset allocation grid. You can think of it like a periodic table of the elements where you can select every asset included in your portfolio.
There are three important inputs to keep an eye on:
Home Country
This is the country where you live, and the setting will affect the inflation and exchange rates used in the calculations as well as the recommended funds in the Asset Allocation section. You can change the country by clicking on the name in the top-right and selecting an option from the dropdown.
Portfolio Percentages
The data does not track individual funds using specific ticker names, but the underlying index that the funds are designed to follow. Each square on the grid represents a different investment index, and the index can be described by two pieces of information — the target market and asset class. For example, SPY is a popular ETF that follows large cap blend stocks in the United States. So if your portfolio includes 60% SPY, enter a “60” in the box at the intersection of USA and LCB.
As you enter asset percentages, the donut chart will automatically update to show the construction of the portfolio. The tools require whole numbers (with no decimals) for each asset, and you may see an error message if you try to get too precise with the numbers. Continue adding assets until the portfolio adds up to 100%.
More information on what all of the asset types mean and how they correspond to real-world funds can be found in the Assets section. For any portfolio, the Asset Allocation section will automatically generate a list of links for detailed information on every asset.
Developed Setting
The Developed row tracks a broad collection of developed countries for the widest possible coverage outside of your home country. But since “international” means different things to different people depending on where you live, there are two settings. The default setting is “Developed ex-US”, which covers all developed countries except for the United States. The alternative is “Developed” which includes the US.
To select the proper setting for your portfolio, choose the desired option from the dropdown. Note that the setting will affect every asset in the row, including both stocks and bonds.
Comparisons
The charts are capable of studying two portfolios at a time. To model two portfolios, click the Compare button and drag the vertical line to the right. While the two charts are perfectly overlaid, they operate independently. By modeling one portfolio on the left and a different one on the right, you can use the slider to study differences in portfolio ideas.
Advanced Features for Members
Portfolio Charts members receive a few additional charts in the Members Toolkit. In addition to the uniquely powerful calculations, these charts also contain a few extra inputs not found in the standard charts — Asset Keys and Portfolio Keys.
Asset keys allow members to model their own data, and portfolio keys let members save full portfolio settings for future reference. These input keys are created and managed in the Toolkit Keychain.
Chart Settings
Beyond the asset allocation percentages, some charts include unique local settings. For example, note the extra inputs for the Retirement Spending calculator:
Chart-level settings will only affect that chart alone and none of the others on the same page. They also operate independently of any shortcode used to pre-fill the asset allocation.
Interpreting the Charts
A common theme that you will find in each and every chart is that they intentionally model every investing timeframe within the available database simultaneously. So not only do they show the investing timeframe starting in 1970, but also the one starting in 1971, 1972, and so on. I call this approach “start-date-independent” backtesting, and I believe it’s a very important method to bypass cherry-picking of data and understand investing uncertainty.
All of that information makes each image very data-dense compared to other tools you may be accustomed to. For full information on how to use and interpret each chart, be sure to visit the individual pages in the Charts section. Also note that some charts include detailed FAQs that cover many of the most common questions. And if you have any additional questions not already covered, feel free to contact me any time.