PORTFOLIO GROWTH

The Portfolio Growth chart plots the full range of a meandering portfolio much like a weather map tracking potential storm paths.  Think of it as beginning your portfolio in every historical year at once and watching how they all unfolded.  Use this to track the growth not only of a static portfolio but also of an ongoing accumulation plan including regular contributions.

How To Interpret The Chart

The Portfolio Growth chart is very similar to a traditional line-chart you may find elsewhere that charts the growth of a portfolio over time, but with one major difference.  Instead of simply charting returns between a single start and end date, it calculates the performance of every historical start date simultaneously.  Every start date is aligned at year zero on the chart, and the resulting spread of returns shows the full range of outcomes regardless of when you were lucky or unlucky enough to invest.

Note that the color of the lines is sorted by start year.  Darker lines are from older start years while lighter lines are from more recent start years.  Depending on the portfolio, you may also see gray lines.  These indicate start years with incomplete data where the returns are only estimated based on the best numbers I have available.

The Portfolio Growth chart also allows you to adjust the settings to model different personal investing scenarios.  The starting value sets the leftmost portfolio origin at the desired point, while the annual contribution controls how much additional money from new savings that you invest every year along the way.  Contributions are adjusted for inflation and represent the same amount of purchasing power each year.

Calculations

Setting an accumulation goal will mark the desired target on the chart. The calculations then find the minimum and maximum number of years that it took to reach the required goal. Note that in some situations the portfolio may reach the goal briefly before falling back below the desired level. In this case, the calculations report the first point where it reached the goal.