This graph compares the performance of your portfolios and investments. The purpose is to compare how well you would have done if you had invested your money in any given investment versus investing it as you did in a portfolio. The performance is compared starting from the beginning graph date (inclusive). To choose which portfolios to overlay use the Overlaid Portfolios Dialog. To choose which investments to overlay use the Overlaid Investments Dialog. There are two different types of this graph: Value or Price + Distributions.
Value:
This graph plots the actual portfolio value and an equivalent hypothetical value for each selected investment. The hypothetical investment value starts off at the same value as your portfolio on the beginning graph date. This hypothetical investment value is displayed as if you had invested all your money in just this investment. When you take money out of (or put money into) the portfolio, the same amount is also taken out of (or put into) the investment. When overlaying investments and multiple portfolios, the "Reference Portfolio" will be used for the hypothetical investment value calculations. (See the Overlaid Portfolios Dialog)
Price + Distributions:
This graph plots the hypothetical portfolio price plus distributions and the normalized price plus distributions for your selected overlaid investments. The portfolio and all overlaid investments start off at an initial price of $100 (user-adjustable). The change in portfolio price is determined by a weighted average of the performance of each investment in the portfolio. The weighting is controlled by each investment's value, as compared to the total portfolio value. The weighting is readjusted on a daily basis.
Example: You have 2 investments in your portfolio, investments A and B. On day 0 investment A has a value of $100 at a share price of $10/share. On day 0 investment B has a value of $300 at a share price of $20/share. Therefore, on day 0 the portfolio has a value of $400, comprised 25% of A, and 75% of B. All investments and the portfolio have the same starting price of $100 on day 0. Assume, that on day 1, investment A increased 10% to a value of $110 and a share price of $11/share, and investment B increased 5% to a value of $315 and a share price of $21/share. The portfolio price would increase by 6.25%:
6.25% = 25% * 10% + 75% * 5%
This would increase the hypothetical portfolio price for day 1 to $106.25. The weightings would then be readjusted to (110/425)*100 % and (315/425)*100 % for the calculations of hypothetical portfolio price for day 2.
To change the initial price used for the Price + Distributions style of this graph see the Display Options Dialog.
Notes:
The hypothetical investment value and hypothetical portfolio price + distribution calculations are done on a daily basis at the closing price each day. Relative differences between these two graph types can occur when transactions are recorded at mid-day prices that differ from the closing price.