The Heat Map chart displays compound annual growth rates not over a single timeframe, but over all timeframes. It’s a great way to visually evaluate how a portfolio performs throughout a variety of economic conditions. Use this to compare how a hot or cold streak stacks up against history, or to see beyond recent returns and rosy averages that may hide a turbulent past.
Chart
Overview
The Heat Map shows the inflation-adjusted CAGR for every investing timeframe based on when you invested and how long you stayed in the market. Look for the start year in the left column and count the appropriate number of squares to the right for the years held. Hover over any cell, and you can see the value of the real CAGR for that start date and investing duration.
The Heat Map is probably best utilized to understand the good and bad times for a portfolio at a glance. Look for the red spots, and that’s a nice reference point for the rough patches often hidden by simple annual returns.
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