24 ms·

Show HN: Inflation-adjusted stock charts – Total Real Returns

507 points by compumike 4y ago

Here's a little side project I’ve been working on: https://totalrealreturns.com/ https://totalrealreturns.com/ The Total Real Returns chart demonstrates the preservation or growth of real wealth more clearly than conventional (nominal-dollar, price-only) stock charts, because: (1) we include the effects of inflation-diminished purchasing power, and (2) we include the effects of reinvesting dividends from the initial investment. I found it harder to explain the y-axis in words than it was to do the math, so please let me know if you think the "baguettes" explanation on the homepage helps. I was up until 4am ET finishing some features on this, and then at 8:30am ET the BLS released the new CPI numbers through their API: https://download.bls.gov/pub/time.series/cu/ https://download.bls.gov/pub/time.series/cu/ and I was able to manually re-run my daily cronjob with the new numbers, so it's up to date! If you catch any bugs, please let me know via the “Report a bug” link in the footer of every page. Some FAANG examples: https://totalrealreturns.com/s/META https://totalrealreturns.com/s/META https://totalrealreturns.com/s/GOOGL https://totalrealreturns.com/s/GOOGL https://totalrealreturns.com/s/AMZN https://totalrealreturns.com/s/AMZN https://totalrealreturns.com/s/AAPL https://totalrealreturns.com/s/AAPL https://totalrealreturns.com/s/NFLX https://totalrealreturns.com/s/NFLX Comparing three Vanguard treasury funds, showing vividly the impact of bond duration (short-term, intermediate-term, long-term) on both risk and reward: https://totalrealreturns.com/s/VFISX,VFITX,VUSTX https://totalrealreturns.com/s/VFISX,VFITX,VUSTX

leethargo 4y ago
I don't understand the details on how inflation is measured here, but I expected the US Dollar curve to be a constant 1, after the normalization. However, it seems to go down. What does that mean? That the dollar loses value faster than "money is printed"?
- kqr 4y ago
  You're thinking of the inflation adjustment the wrong way around. A dollar earned in 1980, if, saved until today, buys less than it would have then.
  - leethargo 4y ago
    Yes, your second sentence makes sense to me. I guess I imagined the inflation-adjusted value of X to be defined at time t to be something like: value(X, t) / value(USD, t). So, when I substitute USD for X, I get constant 1.
    - aidenn0 4y ago
      That was almost right; the correct denominator is value(USD, SOME_FIXED_TIME). Nominal (i.e. non-inflation-adjusted) use value(USD,t) as the denominator implicitly when priced in dollars (hence the term "dollar denominated")
- compumike 4y ago
  Here's what the site does behind the scenes: real_price($ASSET, t) = nominal_price($ASSET, t) * (price_level($NOW) / price_level(t)) Where price_level(t) is the CPI-U series (with interpolation). If t = $NOW, at the right side of the chart, then the fraction goes to 1, so that real_price($ASSET, $NOW) = nominal_price($ASSET, $NOW) (Though many comments are requesting alternative normalization schemes!) For cash (USDOLLAR), nominal_price(USDOLLAR, t) = 1 for all t -- the nominal price of a dollar bill is always 1. So https://totalrealreturns.com/s/USDOLLAR https://totalrealreturns.com/s/USDOLLAR is plotting a curve that looks like 1/price_level(t). (Actually it's 1*price_level(now)/price_level(t), because of the normalization above.) And you can download price_level(t) from https://download.bls.gov/pub/time.series/cu/ https://download.bls.gov/pub/time.series/cu/.
Drblessing 4y ago
I've often read Stocks average +10%/year, is this true when factoring in taxes + inflation? Wondering if other investments that appear less attractive on paper are actually better than traditional equities.
- fleischhauf 4y ago
  aren't they all subject to inflation?
- bolasanibk 4y ago
  From what I understand, SPY returns adjusted for inflation over long term average to 7%.
  - mrep 4y ago
    6%: "The average annual total return and compound annual growth rate of the index, including dividends, since inception in 1926 has been approximately 9.8% (6% after inflation), and the annual standard deviation of the return over the same time period is 20.81%" [0]. [0]: https://en.wikipedia.org/wiki/S%26P_500#Performance https://en.wikipedia.org/wiki/S%26P_500#Performance
deleted 4y ago
[deleted]
Invictus0 4y ago
Does this account for dilutive secondary offerings? Edit: I thought about it some more and now I realize this is a dumb question.
- compumike 4y ago
  Only implicitly. (In that, via market behavior, the nominal price-per-share might drop when companies increase the number of shares outstanding.) But I believe that's all that's needed?
whatshisface 4y ago
How can everything go down at once, doesn't the money have to go somewhere? Best hypotheses so far along with how to test them: 1. Perhaps the parts of the CPI that companies in the stock market can produce are being outpaced by the components that are not produced, like real estate, and so can't contribute to an increase in share prices. (How to check: Look up changes in the CPI components, which are detailed in the reports.) (Edit: This does not hold up, almost all the increases are in energy, which is produced and held in reserve by public companies.) 2. Perhaps the consumer goods in the CPI are increasing in price far more rapidly than prices of goods and services overall, leading to an underestimate of the value of the dollar to anyone except a consumer. (How to check: Since capital goods are eventually used to make consumer goods, this should eventually correct itself. Also, is there a broader version of the CPI?) (Edit: This might be it, although energy is 8% of the CPI and GDP, it is only 4% of the S&P 500.) 3. Perhaps money is leaving the USD, US bonds, and US stocks and going somewhere else. (How to check: Make these same charts but with broader indices.)
- compumike 4y ago
  Money (cash) is not wealth. Wealth can be created, or destroyed. The clearest explanation I've read for this was a PG essay: http://www.paulgraham.com/wealth.html http://www.paulgraham.com/wealth.html specifically the "Money Is Not Wealth", "The Pie Fallacy", and "Craftsmen" sections. Of course this essay has a positive/optimistic take on it, but certainly wealth can be destroyed as well.
  - whatshisface 4y ago
    That's true, but I am not aware of any wealth indices, only price indices, and price indices can only increase and decrease relative to each other.
    - JumpCrisscross 4y ago
      > I am not aware of any wealth indices Term you’re looking for is “benchmark.”
- 4y ago
TekMol 4y ago
I tried to look at QQQ to see the performance of the Nasdaq 100 with dividends reinvested: https://www.tradingview.com/chart/?symbol=NASDAQ%3AQQQ https://www.tradingview.com/chart/?symbol=NASDAQ%3AQQQ But the difference is so small. Nasdaq 100 even performing better. Does QQQ pay out dividends or does the management fee eat up so much that the dividends get cancelled out? Since the development is so similar to the index, I guess they pay dividends. How can one see the Nasdaq 100 performance with dividends reinvested?
- ywain 4y ago
  QQQ does pay quarterly dividends.
simmons 4y ago
Very neat! It's easy to be discouraged seeing how much my investments have fallen in recent months. But this graph makes it seem like the stock market could still be on track, producing slow and steady gains in the long term, when we consider that the crazy bull market of the last couple of years was an aberration. (No guarantees about where the stock market goes from here, of course.) Now, if only I had a crystal ball, or at least was more in tune with the world of finance so I could have ridden the ups and downs more effectively. ;)
fundamental 4y ago
If the goal is to demonstrate relative performance over time, wouldn't it be useful to use a normalization such that all lines either start at the same point (e.g. simulating investing X amount) or ending at the same point (showing requirement to get to X final amount)?
- compumike 4y ago
  I think that's a reasonable idea and I may try including that option in the future. Right now, the start point is quite arbitrary: it's the first date where we have data for all the symbols requested. And date ranges dramatically affect any sort of relative performance comparison. So in the current code I decided to just normalize to today's nominal-dollar value so that the end values are relatable. What would the ideal UX be on this?
  - fundamental 4y ago
    If you want to have ragged starting information displaying pricing information for the various symbols in the range they're defined, I'd assume it's much more common that there's different start dates, but they're all defined for today. So, you could have a single checkbox to normalize based upon equal value at today's value and I'd default to having that on. As your baguette argument about the absolute values not having huge significance still applies it seems like it would work with no other modifications (i.e. it doesn't matter that it could require fractional shares and the like).
  - mediaman 4y ago
    Just index it all to the same starting value, which will have the same effect. I don't think this works for the drawdown chart but works for the total return chart. Usually in economic and financial reporting you show multiple return series by saying, for example, 1989 = 100 and then showing the total return from there for multiple series in the same chart.
  - ricardobayes 4y ago
    Start every asset at 100k? I might be oversimplifying something, but it would really help to see how each asset performed over time.
jonathan-adly 4y ago
The problem with these kind of charts is the implicit message that history is the future. America have been on the dominant financial and militaristic force in the world for the last century and its equities have reflected that strength. Would it continue to be the same for the next century? Who knows! Ray Dalio and the Maxis think otherwise. Good work OP though!
- compumike 4y ago
  Thank you. :) I agree with the "Who knows!" and that we've benefited from a lot of favorable tailwinds, which are quite uncertain for the future. The implicit positivity partially comes from looking at indexes, rather than individual companies. If you look at any specific companies that may have been unstoppable corporate giants in decades past (maybe try https://totalrealreturns.com/s/GE https://totalrealreturns.com/s/GE https://totalrealreturns.com/s/X https://totalrealreturns.com/s/X https://totalrealreturns.com/s/F https://totalrealreturns.com/s/F for example?) the idea of limitless growth becomes much more uncertain.
- TameAntelope 4y ago
  > Portfolio emphasizing U.S. and foreign large- and mid-capitalization value stocks. VFINX is not composed exclusively of US stocks.
  - loeg 4y ago
    It’s an S&P500 fund; that is composed (exclusively) of large cap US stocks.
    - zie 4y ago
      That's not true. It's MOSTLY large cap US stocks, but it has some mid-caps, pretty much regardless of how you define mid-caps.
      - loeg 4y ago
        S&P publish a mid-cap index: the S&P400. It doesn't overlap the S&P500[1]. You have to have a generous definition of mid-cap to describe even the smallest S&P500 component as mid-cap. The 500th component has a market cap of ~$6B. Regardless, they're all US stocks; the comment I was responding to claimed they were not. [1]: https://www.spglobal.com/spdji/en/images/campaign/707133-us-core-diagram-1358x508-1x.png https://www.spglobal.com/spdji/en/images/campaign/707133-us-...
londons_explore 4y ago
Total inflation-adjusted returns are what everyone should be looking at when considering investments. Yet it seems so awfully hard to find that data on stockbrokers sites/apps. Why?
- compumike 4y ago
  I agree and that's why I decided to build it :) I think part of the answer is that: (1) it's very hard to explain what that means to most people ("WTF, why are the historical prices on this chart changing?") beyond simple 2:1 splits, and (2) it's hard to get everyone to agree on what inflation metric to trust/use.
- HFguy 4y ago
  Short answer is some combination of (1) That requires work and then they would have to explain to people and (2) People aren't asking for it. If you want to roll your own, you can use free data from Yahoo and FRED and get there pretty quick. You should also consider tax implications. For example, trading equities short-term is awful and PL taxed at income rate. Compare that to buying real estate which has a 101 ways to avoid paying taxes.
moneywoes 4y ago
Where can I see the percent return inflation adjusted not just the trend line?
- compumike 4y ago
  I'm not currently showing this directly because it's so sensitive to the specific start and end dates. :-/ (Is there a good UX for that?) For now you could calculate it by mousing-over the dates your interested in and reading the values off the chart legend.
Barrera 4y ago
The trick is the to get those inflation-adjusted returns you need 100% time exposure. No selling because circumstances force you to. No selling because you get spooked at a 50% drawdown. Not many people can tolerate even a 20% hit, which explains a lot about the situation the world economy finds itself in.
- TheFreim 4y ago
  This is why I don't follow how my portfolio is doing, knowing doesn't give me much actual information and can often encourage bad behavior (admittedly I don't have many investments compared to many).
  - SV_BubbleTime 4y ago
    I'm with you. I consider this an area where the burden of knowledge will hit you pretty hard. Time suck along with stress, and performing at best case a few percent over an automated "MODERATE RISK" button. I don't have any more time in my life to track anything with the degree that it would take to "be good" at it.
  - s1artibartfast 4y ago
    My philosophy is essentially buy low, hold forever. I don't put money that I might realistically need in the market
    - deathanatos 4y ago
      I mean… that defeats the point, no? Surely you must plan to use the money at some point, even if that is just enjoying the end of your days. That's still a time horizon. > I don't put money that I might realistically need in the market While it's great that you might have a time horizon far, far into the future, not everyone has that luxury. In theory, I'm supposed to purchase a home & start a family around this point in my life, so that's a rather quick time horizon for at least some portion of my wealth.
      - 4y ago
boringg 4y ago
Really illustrates how well dollar holds to inflation.
nathancahill 4y ago
Needs a way to specify the time range. As you mention on the page, the trend lines are very dependent on the time range.
- kaycebasques 4y ago
  I also just requested this via the feature request form in the footer of the site
kaycebasques 4y ago
Thank you for creating this. I appreciate its value and encourage you to keep going.
e63f67dd-065b 4y ago
Huh, so portfoliovisualizer but with slightly more convenient shortcuts built in. Looks neat, but way less powerful than just using portfolio visualiser. I’ve always wondered where the data is sourced; so the exchanges publish this data for all to use, or does everybody have to scrape them together? Obviously if you pay them you’ll get real-time data, but all these free tools do leave me wondering.
- compumike 4y ago
  I'm paying for https://eodhistoricaldata.com/ https://eodhistoricaldata.com/ API access.
nostrademons 4y ago
Wish it had the 70s, or ideally, the whole 20th century. The 80s-2010s has been a period of unusually low inflation and consistent market returns, buoyed by the end of the Cold War and entry of the developing world into the world economy. There's a good chance that we revert to the mean going forwards and see much more geopolitical instability and resource constraints.
- deleted 4y ago
  [deleted]
- Teknoman117 4y ago
  So, what does a young person do these days? First few years out of college were just "max out 401k contributions into some target fund" + build emergency fund, but now that I've amassed more cash than what an emergency fund requires, what does one do? Originally, my plan was to use it for a house down-payment, but with the mortgage rates having nearly doubled in the last 6 months, that's kind of out of the question at this point (especially having moved to a higher property value area to be closer to friends and family). Everything I've seen in the news for last few months just seems to say "sorry, the last 50 years was a gravy train, it'll never work that way again, you're screwed". Both my parents' and grandparents' entire careers existed (or to this point existed) during the "good times", so I'm honestly feeling like I can't just take their advice directly. Part of me wants to leave my present (tech) job and move to a FAANG type company (for the pay increase), but with all the uncertainty on the horizon, are the big tech companies going to maintain their current headcount or salaries if another '08 style recession (or worse) hits? How stable are their revenues if people start spending way less money on things?
  - gabereiser 4y ago
    Go for the house down payment and refinance once the rates go down. A few percentage points aren’t going to make much difference near term.
    - garrickvanburen 4y ago
lostmsu 4y ago
No cryptos?
- compumike 4y ago
  You can use ETFs that hold those assets, for example: https://totalrealreturns.com/s/GBTC,ETHE https://totalrealreturns.com/s/GBTC,ETHE
  - lostmsu 4y ago
    No, you really can not: https://habr-com.translate.goog/ru/post/675802/?_x_tr_sl=ru&_x_tr_tl=en&_x_tr_hl=en&_x_tr_pto=wapp https://habr-com.translate.goog/ru/post/675802/?_x_tr_sl=ru&...
    - dmurdoch 4y ago
      Well, you're both right and wrong. He's right You CAN, but your linked article is also 100% correct, GBTC / trusts are absolutely NOT etf's. There are however etfs for crypto in other districts (I hold for example ethx.b, a canadian ETF that tracks ETH within my RRSP).
      - lostmsu 4y ago
        Well, the funds you mentioned are not on the website.
workah0lic 4y ago
I used to calculate this manually whenever I thought about the reality, and whenever wondering if I can retire. This is really cool. One comment though is the mass of company names at the bottom is illegible so I would think a search box + top 20 list would be better
- ezekg 4y ago
  > One comment though is the mass of company names at the bottom is illegible so I would think a search box + top 20 list would be better Probably for SEO. :)
  - compumike 4y ago
    I'd been planning to add an autocomplete symbol search box. I ran out of time because I knew the new CPI data was being released this morning. I wanted to launch the site today, so last night at 3am ET I just added a big list of symbols. But yeah might be good for SEO too :)
olalonde 4y ago
Suggestion: it would be nice to have a chart like the first one but where relative changes (%) in value are plotted... That would make it easier to use a linear Y axis instead of a logarithmic one (which can be hard to interpret).
artursapek 4y ago
What a dope tool, thanks for building it! I love clean, simple dataviz websites like this.
adrianmsmith 4y ago
Visually it's a really nice looking site. If I may offer one suggestion, it would be to use a minus sign (unicode U+2212) for the negative numbers - by default, for historical pre-unicode reasons, computers tend to use a hyphen instead and it just doesn't look as good, at least to my eye!
- bornfreddy 4y ago
  Thank you, TIL!
noja 4y ago
Which inflation? If I am earning a thousand bucks a month and all my money goes on fixed costs, and those double, my inflation is 100%.
- zie 4y ago
  Clearly they are talking about CPI-U, the common US definition of inflation. Everyone has their own personal inflation rate, mine in 2021 was 1%. We will see how 2022 turns out, but I'm betting it will go up for me.
pedrosorio 4y ago
Having all lines normalized so they start from a common point at x = 0 would be helpful. That would allow reading the total returns as percentage of the initial (1987) investment and compare them. Similarly in the drawdown chart, if it starts at 1987, it makes no sense to start the dollar at -81%. If I am looking at a chart from 1987 to 2022, I want to see how the dollar did compared to other assets in that time period.
- nonethewiser 4y ago
  Is that even possible? Wouldn't that suggest something that is not true?
  - epgui 4y ago
    How is it not true? All these numbers are relative, and you can make the choice of comparing them to whatever reference point you want.
    - rm999 4y ago
      The y-axis has actual meaning: it tells you the purchasing power of a public stock, which will never be 0. What you could do is normalize it by the value of the stock at the start of the chart, which would make the charts start at 1. On a log plot this is the equivalent of dividing all the values by the starting value, which moves the lines up/down but does not change their shape. This could make it easier to compare the lines, but in doing so, you throw out information (the real value of the y axis).
      - pedrosorio 4y ago
        > The y-axis has actual meaning: it tells you the purchasing power of a public stock, which will never be 0. If we are trying to visualize the total return of a given asset since 1987, how is the price of a single stock (an arbitrary unit) in 1987 or any time since, relevant data? The ROI expressed as a percentage on the y axis (with 0% at the beginning of the period) would be a much better visualization of the relative returns among asset classes throughout the period. Currently I get USD < VBMXFX < VFINX at the beginning of the chart, for reasons that have nothing to do with the total return since 1987. The drawdown chart is even more confusing with the USD starting at -81%. If we were plotting a chart of drawdown of multiple currencies, the older ones would start lower (since they've had more time to be affected by inflation) which only makes it hard to visualize the answer to the question "how did they do since 1987".
adrianmsmith 4y ago
One suggestion I would have - it's great that you can drag on the graph to choose a different time period. But the data at the top isn't changed by that change of time period, e.g. https://totalrealreturns.com/s/AAPL https://totalrealreturns.com/s/AAPL stays 1980 to current. Obviously Apple wasn't doing well before the return of Steve Jobs, so it'd be nice to see the data for a shorter time period e.g. in my case I'd love to look at e.g. APPL for 2000 onwards.
loeg 4y ago
What is the Total Real Drawdown chart supposed to show? Does it just reset where 0% is every time the fund reaches a new market high?
- elil17 4y ago
  Yes, that’s correct.
  - loeg 4y ago
    Seems like a kind of useless visualization?
nope96 4y ago
Perhaps Gold should be on the front page, as it is always mentioned as a supposed inflation hedge. also https://www.portfoliovisualizer.com/backtest-asset-class-allocation https://www.portfoliovisualizer.com/backtest-asset-class-all... has stock data back to 1971, it would be nice to go back that far.
- odyssey7 4y ago
  While it's not a security and summarizing its returns is more complex, it would also be interesting to see "home ownership."
  - ianai 4y ago
    Wondering whether the Case-Shiller index would be good for this. The problem with RE is broad heterogeneity.
- throwaway_4ever 4y ago
  Here's an example link: https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=1&timePeriod=4&startYear=1972&firstMonth=1&endYear=2022&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&asset1=TotalStockMarket&allocation1_1=100&asset2=TreasuryNotes&allocation2_2=100&asset3=Gold&allocation3_3=100 https://www.portfoliovisualizer.com/backtest-asset-class-all... If you scroll down, under the "Portfolio Growth" chart, you can check "inflation adjusted" to get a common start, something TFA doesn't have.
freeqaz 4y ago
The baguette bit is what made it "click" for me. Thank you!
jackallis 4y ago
amy "only issue" is now what? sure chart looks to good to look; there is good info but what actions do i take now that inflation eats everything, like salt to metal.
snake_doc 4y ago
Why not use Fed’s preferred measure PCEPI for longer term aggregate inflation adjustments? CPI is not adequate for long term adjustments for a variety of reasons. The common capital market comparison for these equity returns is against real risk-free returns. That benchmark is largely missing here.
nestvine 4y ago
What tech stack are you using? The speed is impressive.
- compumike 4y ago
  BACKEND: It's about 3000 lines of Crystal code https://crystal-lang.org/ https://crystal-lang.org/ -- it's been an absolute dream to program in. Ruby-like syntax, statically compiled performance. Nice standard library. Would recommend :) Performance == caching Local ephemeral filesystem for shortest-term caching. Redis for shared medium-term caching and locking. S3-compatible object storage for longest-term caching (for raw data feeds pulled every evening by a cronjob). FRONTEND: Bootstrap uPlot https://github.com/leeoniya/uPlot https://github.com/leeoniya/uPlot Just a sprinkle of inline JS+CSS on the page.
  - leeoniya 4y ago
    uPlot spotted in the wild! <3
    - compumike 4y ago
      uPlot is great! Thank you for building it! :)
dcolkitt 4y ago
Would be interesting to insert the classic 60/40 stock/bond portfolio. Maybe also potentially a commodity index as well.
zitterbewegung 4y ago
This is neat you can see the s&p having gained approximately 6 percent on average and inflation targeted almost to be 2 percent.
Animats 4y ago
Over 30 years, you did OK. But there were 10 year down periods.
mNovak 4y ago
At a glance this seems to show that bonds are in a historic drawdown. Can anyone ELI5 the implications of that?
- MacsHeadroom 4y ago
  As with any unprecedented economic phenomena, the full implications are unknown. For one thing, people retiring right now, who followed the best practice of shifting their portfolio towards bonds, are seeing millions wiped out from their individual retirement accounts. For a huge amount of would-be retirees, this is the difference between being able to afford retirement and being forced to remain in the workforce in the last years of their lives.
  - snake_doc 4y ago
    For retirees, it depends. If they are in a target date fund, which most retirees are, the funds adjust their bond holding’s duration to minimize interest rate risk. The target date funds should have lowered the duration of the fixed income portfolio (ie from long dated to short dated) once they approach the target date. The impact to short duration bond portfolios is not as drastic. A 2-year bond issued at .5% yield will lose maybe 5% in price when interest rate moves up to 3%. This is roughly what happened: https://fred.stlouisfed.org/series/DGS2 https://fred.stlouisfed.org/series/DGS2
rrevi 4y ago
“Rendered by the Crystal programming language in 739 µs.” Very nice!
rrevi 4y ago
Thanks for sharing compumike! Very cool!! If you don’t mind me asking, why did you choose the Crystal programming language for this project?
- compumike 4y ago
  Crystal https://crystal-lang.org/ https://crystal-lang.org/ is beautiful, highly performant, concise, powerful, well documented. It has a solid standard library and plenty of "shards" (packages) too. It's really the elegance of writing it that I appreciate the most -- perhaps even more than I get that elegant feeling from Ruby. The code for the standard library is highly readable and well documented, which is awesome. In working on this project, I discovered two "superpowers" of Crystal: The first was macros https://crystal-lang.org/reference/1.5/syntax_and_semantics/macros/index.html https://crystal-lang.org/reference/1.5/syntax_and_semantics/... which I used sparingly, but to great effect, when an ordinary method call wouldn't do. The second was monkeypatching: specifically, it's super easy to reopen existing standard library classes and add a field I need, for example: # BEGIN MONKEYPATCH class HTTP::Server::Context property response_body_cache_key : String? = nil end # END MONKEYPATCH This adds a new field the standard library HTTP::Server::Context https://github.com/crystal-lang/crystal/blob/1.5.0/src/http/server/context.cr https://github.com/crystal-lang/crystal/blob/1.5.0/src/http/... / https://crystal-lang.org/api/1.5.0/HTTP/Server/Context.html https://crystal-lang.org/api/1.5.0/HTTP/Server/Context.html so I can specify a cache key near the beginning of a request handler, and later my response middleware picks it up to store the response body.
skyde 4y ago
I wish the display of "Trendline' and "worst Drawdown" at the top would be calculated based on the selected time interval at the bottom. For index that have existed for a long time it make comparing with other index hard if we always include the full history.
nemo44x 4y ago
As of today, you need about 12% returns to break even after inflation and the IRS eat your return. Anything less than that and you are effectively losing. Especially annoying that capital gains taxes will be paid on any profits, even those less than inflation. Time for a new rule.
- throwawaylala1 4y ago
  Wouldn't you lose more just by sitting on cash? Even now?
  - nemo44x 4y ago
    Yeah, unless you have it earmarked for something today it isn’t worth having cash lying around except for buffer funds. It’s a bad time all around right now. Best off sitting on investments for the foreseeable future.
- danuker 4y ago
  You can get ROIs better than the stock market. Some examples are education, and if you own a home, an energy audit.
- zaroth 4y ago
  Inflation is a good reason why long term capital gains rates are lower than income tax rates. You can argue about the timeframe and getting the whole break after 1 year versus maybe giving larger breaks the longer you hold, but that’s the weeds.
  - nemo44x 4y ago
    Principal should be adjusted for inflation. If I invest $10k and the investment is worth $11k today but we’ve experienced 10% inflation in that time then my actual profit is 0 and I should pay no tax on the $1k of proceeds.
    - pessimizer 4y ago
jl2718 4y ago
This period has been very special because of the 401k, which is itself part of the growth story of the corporate legal structure. I think this is coming to an end. Corporate boards and officers no longer represent the best long-term interests of the companies and shareholders they represent. It’s also a very precarious legal status as an arbitrary judicial ruling can make or break a company. Finally, and perhaps most importantly, the corporate bubble is based on arbitrary tax codes that both advantage corporations and push worker savings into the stock market. Even if these conditions continue unabated, the cash flows from working class into the stock market will eventually hit equilibrium with capital extraction from the owner class. If the extractions return to the same markets, then things stay in equilibrium. They won’t, however, because the tax advantaged assets are different for them. They may seek hyper-volatility, or government bond shelters, but will generally avoid the assets on the working class tax treadmill. There are fundamentals to financial assets that have nothing to do with “number go up”, and these will ultimately dictate reality, with the caveat that “the markets will remain irrational longer than you will remain solvent”. Rationals get wrecked too, except every once in a while when one gets lucky on their timing and makes so much money that they become a hero and we make movies about them. We cheer because it gives us hope that our intuition will serve us too. Unlikely. This is all to say that such charts are using an inductive hypothesis to predict an inherently anti-inductive phenomenon. People tithe and sacrifice to their church for a promise of rewards in the afterlife. The stonk religion is the same; well worth the price for your peace of mind. True or not, you’d be a mess without it.
- mistrial9 4y ago
  > People tithe and sacrifice to their church for a promise of rewards in the afterlife. could you strengthen your argument by omitting casual broad-brush explanations of religion, please?
  - jl2718 4y ago
    Well, I can't anymore, but, I might have instead said something about how religion is commonly maligned for such practices. This is only to show that modern investment practices bear strong elements of ritualistic faith. Your response is most welcome. Thank you.
kurthr 4y ago
What I like most about this is the logarithmic plot of prices. That makes multiplicative % return a constant size and allows for easy representation of exponential growth.
01100011 4y ago
Aren't dividends taxed? If so, you should have a way to set the tax rate for them so folks can evaluate performance in a taxable account vs tax free.
ricksunny 4y ago
Do you capture the effects of a ticker symbol delisting from the index? Trivial for a single stock of course, but looking across a portfolio, then the effects from delisting from an index, new listings into the index, stock splits, and M&A inevitably becomes a thing.
icu 4y ago
So you used CPI as your inflation measure? I personally don't think CPI or RPI is a good inflation yardstick, because the calculations change over time. For consistency I would suggest you try Shadow Stats or the year on year growth of the M2 money supply.
- imtringued 4y ago
  Shadowstats doesn't know how exponential growth works. The people who believe in shadowstats don't understand it either.
  - icu 4y ago
    I'm not sure I see the link between understanding exponential growth and Shadow Stats? Shadow Stats holds the CPI definition constant over the time period, whereas Uncle Sam jukes the CPI however way he's feeling for "reasons". The reason why I suggested Shadow Stats was that it seems like compumike is trying to show the change in purchasing power over time with https://totalrealreturns.com/ https://totalrealreturns.com/. It's a fantastic idea trying to make the concept of the time value of money, and purchasing power more accessable to the masses. It probably took a lot of work and I appreciate the effort. Imho the correct way to do this is to hold as many variables constant over the timeseries. My point is that since official CPI isn't constant, and imho a bad measure of inflation anyway, using M2 or Shadow Stats woudl be the better way to go.
imtringued 4y ago
This is offtopic but I am tired of pretentious people. The money supply must grow exponentially because liquidity premiums aka interest payments. You can now either choose to eliminate liquidity premiums and hence abolish inflation and exponential growth in the money supply or you can choose to have inflation and an exponentially growing money supply with endless increases in public debt. The fact that if the money supply is $100 and 2% interest must be paid which is then subsequently reinvested for compounding obviously requires the economy to keep track of $102. Hence compound interest which is caused by liquidity premiums results in a perpetual increase in the money supply. The fact that governments must borrow money is purely how we decided to run the system right now. You could in theory do helicopter money as well and it would amount to the same. Now, since positive interest rates result in an increase in the money supply, reducing the money supply requires the opposite, i.e. negative interest rates. Negative interest rates don't exist because of cash. That is the only reason. People don't want negative interest rates because they actually love the illusion of earning compound interest and subsequent inflation which cancels out the interest. People criticise inflation while simultaneously criticizing negative interest rates, the height of hypocrisy. After all, if you implement negative interest rates a while lot of people will have to work instead of living off the work of others. They say that it is unfair to not turn other people into debt slaves, while simultaneously criticizing how unjust it is, that their dreams of turning other nations and future generations into debt slaves is disrupted by so called defaults and debt restructuring. They yell out debt is bad while secretly desiring to have debt slaves of their own.
- mensetmanusman 4y ago
  The money supply must grow because of population increase. Population was almost exponential growth in the last century, but now it has essentially stopped so we are entering a new paradigm. The stock market under a declining population will be fascinating to watch.
  - bushbaba 4y ago
    Automation will allow us to produce more with less people resources leading to increased consumption per capita of goods and services letting the game continue. Population decline will not be kind to society without AI/Robotics to take care of us.
uoaei 4y ago
A tip: define what "drawdown" means on the page itself.
aagha 4y ago
This is really cool, but it would be more useful (IMO) with the following changes: - Have all comparisons start at 0 - Ditch the log scale
anonu 4y ago
Most stock time series are corporate action adjusted when displayed on a chart. So even if they are in dollars they will reflect total return.

507 points by compumike 4y ago

leethargo 4y ago

I don't understand the details on how inflation is measured here, but I expected the US Dollar curve to be a constant 1, after the normalization. However, it seems to go down. What does that mean? That the dollar loses value faster than "money is printed"?

kqr 4y ago
You're thinking of the inflation adjustment the wrong way around. A dollar earned in 1980, if, saved until today, buys less than it would have then.
- leethargo 4y ago
  Yes, your second sentence makes sense to me. I guess I imagined the inflation-adjusted value of X to be defined at time t to be something like: value(X, t) / value(USD, t). So, when I substitute USD for X, I get constant 1.
  - aidenn0 4y ago
    That was almost right; the correct denominator is value(USD, SOME_FIXED_TIME). Nominal (i.e. non-inflation-adjusted) use value(USD,t) as the denominator implicitly when priced in dollars (hence the term "dollar denominated")
compumike 4y ago
Here's what the site does behind the scenes: real_price($ASSET, t) = nominal_price($ASSET, t) * (price_level($NOW) / price_level(t)) Where price_level(t) is the CPI-U series (with interpolation). If t = $NOW, at the right side of the chart, then the fraction goes to 1, so that real_price($ASSET, $NOW) = nominal_price($ASSET, $NOW) (Though many comments are requesting alternative normalization schemes!) For cash (USDOLLAR), nominal_price(USDOLLAR, t) = 1 for all t -- the nominal price of a dollar bill is always 1. So https://totalrealreturns.com/s/USDOLLAR https://totalrealreturns.com/s/USDOLLAR is plotting a curve that looks like 1/price_level(t). (Actually it's 1*price_level(now)/price_level(t), because of the normalization above.) And you can download price_level(t) from https://download.bls.gov/pub/time.series/cu/ https://download.bls.gov/pub/time.series/cu/.

Drblessing 4y ago

I've often read Stocks average +10%/year, is this true when factoring in taxes + inflation? Wondering if other investments that appear less attractive on paper are actually better than traditional equities.

fleischhauf 4y ago
aren't they all subject to inflation?
bolasanibk 4y ago
From what I understand, SPY returns adjusted for inflation over long term average to 7%.
- mrep 4y ago
  6%: "The average annual total return and compound annual growth rate of the index, including dividends, since inception in 1926 has been approximately 9.8% (6% after inflation), and the annual standard deviation of the return over the same time period is 20.81%" [0]. [0]: https://en.wikipedia.org/wiki/S%26P_500#Performance https://en.wikipedia.org/wiki/S%26P_500#Performance

deleted 4y ago

[deleted]

Invictus0 4y ago

Does this account for dilutive secondary offerings? Edit: I thought about it some more and now I realize this is a dumb question.

compumike 4y ago
Only implicitly. (In that, via market behavior, the nominal price-per-share might drop when companies increase the number of shares outstanding.) But I believe that's all that's needed?

whatshisface 4y ago

How can everything go down at once, doesn't the money have to go somewhere? Best hypotheses so far along with how to test them: 1. Perhaps the parts of the CPI that companies in the stock market can produce are being outpaced by the components that are not produced, like real estate, and so can't contribute to an increase in share prices. (How to check: Look up changes in the CPI components, which are detailed in the reports.) (Edit: This does not hold up, almost all the increases are in energy, which is produced and held in reserve by public companies.) 2. Perhaps the consumer goods in the CPI are increasing in price far more rapidly than prices of goods and services overall, leading to an underestimate of the value of the dollar to anyone except a consumer. (How to check: Since capital goods are eventually used to make consumer goods, this should eventually correct itself. Also, is there a broader version of the CPI?) (Edit: This might be it, although energy is 8% of the CPI and GDP, it is only 4% of the S&P 500.) 3. Perhaps money is leaving the USD, US bonds, and US stocks and going somewhere else. (How to check: Make these same charts but with broader indices.)

compumike 4y ago
Money (cash) is not wealth. Wealth can be created, or destroyed. The clearest explanation I've read for this was a PG essay: http://www.paulgraham.com/wealth.html http://www.paulgraham.com/wealth.html specifically the "Money Is Not Wealth", "The Pie Fallacy", and "Craftsmen" sections. Of course this essay has a positive/optimistic take on it, but certainly wealth can be destroyed as well.
- whatshisface 4y ago
  That's true, but I am not aware of any wealth indices, only price indices, and price indices can only increase and decrease relative to each other.
  - JumpCrisscross 4y ago
    > I am not aware of any wealth indices Term you’re looking for is “benchmark.”
4y ago

TekMol 4y ago

I tried to look at QQQ to see the performance of the Nasdaq 100 with dividends reinvested: https://www.tradingview.com/chart/?symbol=NASDAQ%3AQQQ https://www.tradingview.com/chart/?symbol=NASDAQ%3AQQQ But the difference is so small. Nasdaq 100 even performing better. Does QQQ pay out dividends or does the management fee eat up so much that the dividends get cancelled out? Since the development is so similar to the index, I guess they pay dividends. How can one see the Nasdaq 100 performance with dividends reinvested?

ywain 4y ago
QQQ does pay quarterly dividends.

simmons 4y ago

Very neat! It's easy to be discouraged seeing how much my investments have fallen in recent months. But this graph makes it seem like the stock market could still be on track, producing slow and steady gains in the long term, when we consider that the crazy bull market of the last couple of years was an aberration. (No guarantees about where the stock market goes from here, of course.) Now, if only I had a crystal ball, or at least was more in tune with the world of finance so I could have ridden the ups and downs more effectively. ;)

fundamental 4y ago

If the goal is to demonstrate relative performance over time, wouldn't it be useful to use a normalization such that all lines either start at the same point (e.g. simulating investing X amount) or ending at the same point (showing requirement to get to X final amount)?

compumike 4y ago
I think that's a reasonable idea and I may try including that option in the future. Right now, the start point is quite arbitrary: it's the first date where we have data for all the symbols requested. And date ranges dramatically affect any sort of relative performance comparison. So in the current code I decided to just normalize to today's nominal-dollar value so that the end values are relatable. What would the ideal UX be on this?
- fundamental 4y ago
  If you want to have ragged starting information displaying pricing information for the various symbols in the range they're defined, I'd assume it's much more common that there's different start dates, but they're all defined for today. So, you could have a single checkbox to normalize based upon equal value at today's value and I'd default to having that on. As your baguette argument about the absolute values not having huge significance still applies it seems like it would work with no other modifications (i.e. it doesn't matter that it could require fractional shares and the like).
- mediaman 4y ago
  Just index it all to the same starting value, which will have the same effect. I don't think this works for the drawdown chart but works for the total return chart. Usually in economic and financial reporting you show multiple return series by saying, for example, 1989 = 100 and then showing the total return from there for multiple series in the same chart.
- ricardobayes 4y ago
  Start every asset at 100k? I might be oversimplifying something, but it would really help to see how each asset performed over time.

jonathan-adly 4y ago

The problem with these kind of charts is the implicit message that history is the future. America have been on the dominant financial and militaristic force in the world for the last century and its equities have reflected that strength. Would it continue to be the same for the next century? Who knows! Ray Dalio and the Maxis think otherwise. Good work OP though!

compumike 4y ago
Thank you. :) I agree with the "Who knows!" and that we've benefited from a lot of favorable tailwinds, which are quite uncertain for the future. The implicit positivity partially comes from looking at indexes, rather than individual companies. If you look at any specific companies that may have been unstoppable corporate giants in decades past (maybe try https://totalrealreturns.com/s/GE https://totalrealreturns.com/s/GE https://totalrealreturns.com/s/X https://totalrealreturns.com/s/X https://totalrealreturns.com/s/F https://totalrealreturns.com/s/F for example?) the idea of limitless growth becomes much more uncertain.
TameAntelope 4y ago
> Portfolio emphasizing U.S. and foreign large- and mid-capitalization value stocks. VFINX is not composed exclusively of US stocks.
- loeg 4y ago
  It’s an S&P500 fund; that is composed (exclusively) of large cap US stocks.
  - zie 4y ago
    That's not true. It's MOSTLY large cap US stocks, but it has some mid-caps, pretty much regardless of how you define mid-caps.
    - loeg 4y ago
      S&P publish a mid-cap index: the S&P400. It doesn't overlap the S&P500[1]. You have to have a generous definition of mid-cap to describe even the smallest S&P500 component as mid-cap. The 500th component has a market cap of ~$6B. Regardless, they're all US stocks; the comment I was responding to claimed they were not. [1]: https://www.spglobal.com/spdji/en/images/campaign/707133-us-core-diagram-1358x508-1x.png https://www.spglobal.com/spdji/en/images/campaign/707133-us-...

londons_explore 4y ago

Total inflation-adjusted returns are what everyone should be looking at when considering investments. Yet it seems so awfully hard to find that data on stockbrokers sites/apps. Why?

compumike 4y ago
I agree and that's why I decided to build it :) I think part of the answer is that: (1) it's very hard to explain what that means to most people ("WTF, why are the historical prices on this chart changing?") beyond simple 2:1 splits, and (2) it's hard to get everyone to agree on what inflation metric to trust/use.
HFguy 4y ago
Short answer is some combination of (1) That requires work and then they would have to explain to people and (2) People aren't asking for it. If you want to roll your own, you can use free data from Yahoo and FRED and get there pretty quick. You should also consider tax implications. For example, trading equities short-term is awful and PL taxed at income rate. Compare that to buying real estate which has a 101 ways to avoid paying taxes.

moneywoes 4y ago

Where can I see the percent return inflation adjusted not just the trend line?

compumike 4y ago
I'm not currently showing this directly because it's so sensitive to the specific start and end dates. :-/ (Is there a good UX for that?) For now you could calculate it by mousing-over the dates your interested in and reading the values off the chart legend.

Barrera 4y ago

The trick is the to get those inflation-adjusted returns you need 100% time exposure. No selling because circumstances force you to. No selling because you get spooked at a 50% drawdown. Not many people can tolerate even a 20% hit, which explains a lot about the situation the world economy finds itself in.

TheFreim 4y ago
This is why I don't follow how my portfolio is doing, knowing doesn't give me much actual information and can often encourage bad behavior (admittedly I don't have many investments compared to many).
- SV_BubbleTime 4y ago
  I'm with you. I consider this an area where the burden of knowledge will hit you pretty hard. Time suck along with stress, and performing at best case a few percent over an automated "MODERATE RISK" button. I don't have any more time in my life to track anything with the degree that it would take to "be good" at it.
- s1artibartfast 4y ago
  My philosophy is essentially buy low, hold forever. I don't put money that I might realistically need in the market
  - deathanatos 4y ago
    I mean… that defeats the point, no? Surely you must plan to use the money at some point, even if that is just enjoying the end of your days. That's still a time horizon. > I don't put money that I might realistically need in the market While it's great that you might have a time horizon far, far into the future, not everyone has that luxury. In theory, I'm supposed to purchase a home & start a family around this point in my life, so that's a rather quick time horizon for at least some portion of my wealth.
    - 4y ago

boringg 4y ago

Really illustrates how well dollar holds to inflation.

nathancahill 4y ago

Needs a way to specify the time range. As you mention on the page, the trend lines are very dependent on the time range.

kaycebasques 4y ago
I also just requested this via the feature request form in the footer of the site

kaycebasques 4y ago

Thank you for creating this. I appreciate its value and encourage you to keep going.

e63f67dd-065b 4y ago

Huh, so portfoliovisualizer but with slightly more convenient shortcuts built in. Looks neat, but way less powerful than just using portfolio visualiser. I’ve always wondered where the data is sourced; so the exchanges publish this data for all to use, or does everybody have to scrape them together? Obviously if you pay them you’ll get real-time data, but all these free tools do leave me wondering.

compumike 4y ago
I'm paying for https://eodhistoricaldata.com/ https://eodhistoricaldata.com/ API access.

nostrademons 4y ago

Wish it had the 70s, or ideally, the whole 20th century. The 80s-2010s has been a period of unusually low inflation and consistent market returns, buoyed by the end of the Cold War and entry of the developing world into the world economy. There's a good chance that we revert to the mean going forwards and see much more geopolitical instability and resource constraints.

deleted 4y ago
[deleted]
Teknoman117 4y ago
So, what does a young person do these days? First few years out of college were just "max out 401k contributions into some target fund" + build emergency fund, but now that I've amassed more cash than what an emergency fund requires, what does one do? Originally, my plan was to use it for a house down-payment, but with the mortgage rates having nearly doubled in the last 6 months, that's kind of out of the question at this point (especially having moved to a higher property value area to be closer to friends and family). Everything I've seen in the news for last few months just seems to say "sorry, the last 50 years was a gravy train, it'll never work that way again, you're screwed". Both my parents' and grandparents' entire careers existed (or to this point existed) during the "good times", so I'm honestly feeling like I can't just take their advice directly. Part of me wants to leave my present (tech) job and move to a FAANG type company (for the pay increase), but with all the uncertainty on the horizon, are the big tech companies going to maintain their current headcount or salaries if another '08 style recession (or worse) hits? How stable are their revenues if people start spending way less money on things?
- gabereiser 4y ago
  Go for the house down payment and refinance once the rates go down. A few percentage points aren’t going to make much difference near term.
  - garrickvanburen 4y ago

lostmsu 4y ago

No cryptos?

compumike 4y ago
You can use ETFs that hold those assets, for example: https://totalrealreturns.com/s/GBTC,ETHE https://totalrealreturns.com/s/GBTC,ETHE
- lostmsu 4y ago
  No, you really can not: https://habr-com.translate.goog/ru/post/675802/?_x_tr_sl=ru&_x_tr_tl=en&_x_tr_hl=en&_x_tr_pto=wapp https://habr-com.translate.goog/ru/post/675802/?_x_tr_sl=ru&...
  - dmurdoch 4y ago
    Well, you're both right and wrong. He's right You CAN, but your linked article is also 100% correct, GBTC / trusts are absolutely NOT etf's. There are however etfs for crypto in other districts (I hold for example ethx.b, a canadian ETF that tracks ETH within my RRSP).
    - lostmsu 4y ago
      Well, the funds you mentioned are not on the website.

workah0lic 4y ago

I used to calculate this manually whenever I thought about the reality, and whenever wondering if I can retire. This is really cool. One comment though is the mass of company names at the bottom is illegible so I would think a search box + top 20 list would be better

ezekg 4y ago
> One comment though is the mass of company names at the bottom is illegible so I would think a search box + top 20 list would be better Probably for SEO. :)
- compumike 4y ago
  I'd been planning to add an autocomplete symbol search box. I ran out of time because I knew the new CPI data was being released this morning. I wanted to launch the site today, so last night at 3am ET I just added a big list of symbols. But yeah might be good for SEO too :)

olalonde 4y ago

Suggestion: it would be nice to have a chart like the first one but where relative changes (%) in value are plotted... That would make it easier to use a linear Y axis instead of a logarithmic one (which can be hard to interpret).

artursapek 4y ago

What a dope tool, thanks for building it! I love clean, simple dataviz websites like this.

adrianmsmith 4y ago

Visually it's a really nice looking site. If I may offer one suggestion, it would be to use a minus sign (unicode U+2212) for the negative numbers - by default, for historical pre-unicode reasons, computers tend to use a hyphen instead and it just doesn't look as good, at least to my eye!

bornfreddy 4y ago
Thank you, TIL!

noja 4y ago

Which inflation? If I am earning a thousand bucks a month and all my money goes on fixed costs, and those double, my inflation is 100%.

zie 4y ago
Clearly they are talking about CPI-U, the common US definition of inflation. Everyone has their own personal inflation rate, mine in 2021 was 1%. We will see how 2022 turns out, but I'm betting it will go up for me.

pedrosorio 4y ago

Having all lines normalized so they start from a common point at x = 0 would be helpful. That would allow reading the total returns as percentage of the initial (1987) investment and compare them. Similarly in the drawdown chart, if it starts at 1987, it makes no sense to start the dollar at -81%. If I am looking at a chart from 1987 to 2022, I want to see how the dollar did compared to other assets in that time period.

nonethewiser 4y ago
Is that even possible? Wouldn't that suggest something that is not true?
- epgui 4y ago
  How is it not true? All these numbers are relative, and you can make the choice of comparing them to whatever reference point you want.
  - rm999 4y ago
    The y-axis has actual meaning: it tells you the purchasing power of a public stock, which will never be 0. What you could do is normalize it by the value of the stock at the start of the chart, which would make the charts start at 1. On a log plot this is the equivalent of dividing all the values by the starting value, which moves the lines up/down but does not change their shape. This could make it easier to compare the lines, but in doing so, you throw out information (the real value of the y axis).
    - pedrosorio 4y ago
      > The y-axis has actual meaning: it tells you the purchasing power of a public stock, which will never be 0. If we are trying to visualize the total return of a given asset since 1987, how is the price of a single stock (an arbitrary unit) in 1987 or any time since, relevant data? The ROI expressed as a percentage on the y axis (with 0% at the beginning of the period) would be a much better visualization of the relative returns among asset classes throughout the period. Currently I get USD < VBMXFX < VFINX at the beginning of the chart, for reasons that have nothing to do with the total return since 1987. The drawdown chart is even more confusing with the USD starting at -81%. If we were plotting a chart of drawdown of multiple currencies, the older ones would start lower (since they've had more time to be affected by inflation) which only makes it hard to visualize the answer to the question "how did they do since 1987".

adrianmsmith 4y ago

One suggestion I would have - it's great that you can drag on the graph to choose a different time period. But the data at the top isn't changed by that change of time period, e.g. https://totalrealreturns.com/s/AAPL https://totalrealreturns.com/s/AAPL stays 1980 to current. Obviously Apple wasn't doing well before the return of Steve Jobs, so it'd be nice to see the data for a shorter time period e.g. in my case I'd love to look at e.g. APPL for 2000 onwards.

loeg 4y ago

What is the Total Real Drawdown chart supposed to show? Does it just reset where 0% is every time the fund reaches a new market high?

elil17 4y ago
Yes, that’s correct.
- loeg 4y ago
  Seems like a kind of useless visualization?

nope96 4y ago

Perhaps Gold should be on the front page, as it is always mentioned as a supposed inflation hedge. also https://www.portfoliovisualizer.com/backtest-asset-class-allocation https://www.portfoliovisualizer.com/backtest-asset-class-all... has stock data back to 1971, it would be nice to go back that far.

odyssey7 4y ago
While it's not a security and summarizing its returns is more complex, it would also be interesting to see "home ownership."
- ianai 4y ago
  Wondering whether the Case-Shiller index would be good for this. The problem with RE is broad heterogeneity.
throwaway_4ever 4y ago
Here's an example link: https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=1&timePeriod=4&startYear=1972&firstMonth=1&endYear=2022&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&asset1=TotalStockMarket&allocation1_1=100&asset2=TreasuryNotes&allocation2_2=100&asset3=Gold&allocation3_3=100 https://www.portfoliovisualizer.com/backtest-asset-class-all... If you scroll down, under the "Portfolio Growth" chart, you can check "inflation adjusted" to get a common start, something TFA doesn't have.

freeqaz 4y ago

The baguette bit is what made it "click" for me. Thank you!

jackallis 4y ago

amy "only issue" is now what? sure chart looks to good to look; there is good info but what actions do i take now that inflation eats everything, like salt to metal.

snake_doc 4y ago

Why not use Fed’s preferred measure PCEPI for longer term aggregate inflation adjustments? CPI is not adequate for long term adjustments for a variety of reasons. The common capital market comparison for these equity returns is against real risk-free returns. That benchmark is largely missing here.

nestvine 4y ago

What tech stack are you using? The speed is impressive.

compumike 4y ago
BACKEND: It's about 3000 lines of Crystal code https://crystal-lang.org/ https://crystal-lang.org/ -- it's been an absolute dream to program in. Ruby-like syntax, statically compiled performance. Nice standard library. Would recommend :) Performance == caching Local ephemeral filesystem for shortest-term caching. Redis for shared medium-term caching and locking. S3-compatible object storage for longest-term caching (for raw data feeds pulled every evening by a cronjob). FRONTEND: Bootstrap uPlot https://github.com/leeoniya/uPlot https://github.com/leeoniya/uPlot Just a sprinkle of inline JS+CSS on the page.
- leeoniya 4y ago
  uPlot spotted in the wild! <3
  - compumike 4y ago
    uPlot is great! Thank you for building it! :)

dcolkitt 4y ago

Would be interesting to insert the classic 60/40 stock/bond portfolio. Maybe also potentially a commodity index as well.

zitterbewegung 4y ago

This is neat you can see the s&p having gained approximately 6 percent on average and inflation targeted almost to be 2 percent.

Animats 4y ago

Over 30 years, you did OK. But there were 10 year down periods.

mNovak 4y ago

At a glance this seems to show that bonds are in a historic drawdown. Can anyone ELI5 the implications of that?

MacsHeadroom 4y ago
As with any unprecedented economic phenomena, the full implications are unknown. For one thing, people retiring right now, who followed the best practice of shifting their portfolio towards bonds, are seeing millions wiped out from their individual retirement accounts. For a huge amount of would-be retirees, this is the difference between being able to afford retirement and being forced to remain in the workforce in the last years of their lives.
- snake_doc 4y ago
  For retirees, it depends. If they are in a target date fund, which most retirees are, the funds adjust their bond holding’s duration to minimize interest rate risk. The target date funds should have lowered the duration of the fixed income portfolio (ie from long dated to short dated) once they approach the target date. The impact to short duration bond portfolios is not as drastic. A 2-year bond issued at .5% yield will lose maybe 5% in price when interest rate moves up to 3%. This is roughly what happened: https://fred.stlouisfed.org/series/DGS2 https://fred.stlouisfed.org/series/DGS2

rrevi 4y ago

“Rendered by the Crystal programming language in 739 µs.” Very nice!

rrevi 4y ago

Thanks for sharing compumike! Very cool!! If you don’t mind me asking, why did you choose the Crystal programming language for this project?

compumike 4y ago
Crystal https://crystal-lang.org/ https://crystal-lang.org/ is beautiful, highly performant, concise, powerful, well documented. It has a solid standard library and plenty of "shards" (packages) too. It's really the elegance of writing it that I appreciate the most -- perhaps even more than I get that elegant feeling from Ruby. The code for the standard library is highly readable and well documented, which is awesome. In working on this project, I discovered two "superpowers" of Crystal: The first was macros https://crystal-lang.org/reference/1.5/syntax_and_semantics/macros/index.html https://crystal-lang.org/reference/1.5/syntax_and_semantics/... which I used sparingly, but to great effect, when an ordinary method call wouldn't do. The second was monkeypatching: specifically, it's super easy to reopen existing standard library classes and add a field I need, for example: # BEGIN MONKEYPATCH class HTTP::Server::Context property response_body_cache_key : String? = nil end # END MONKEYPATCH This adds a new field the standard library HTTP::Server::Context https://github.com/crystal-lang/crystal/blob/1.5.0/src/http/server/context.cr https://github.com/crystal-lang/crystal/blob/1.5.0/src/http/... / https://crystal-lang.org/api/1.5.0/HTTP/Server/Context.html https://crystal-lang.org/api/1.5.0/HTTP/Server/Context.html so I can specify a cache key near the beginning of a request handler, and later my response middleware picks it up to store the response body.

skyde 4y ago

I wish the display of "Trendline' and "worst Drawdown" at the top would be calculated based on the selected time interval at the bottom. For index that have existed for a long time it make comparing with other index hard if we always include the full history.

nemo44x 4y ago

As of today, you need about 12% returns to break even after inflation and the IRS eat your return. Anything less than that and you are effectively losing. Especially annoying that capital gains taxes will be paid on any profits, even those less than inflation. Time for a new rule.

throwawaylala1 4y ago
Wouldn't you lose more just by sitting on cash? Even now?
- nemo44x 4y ago
  Yeah, unless you have it earmarked for something today it isn’t worth having cash lying around except for buffer funds. It’s a bad time all around right now. Best off sitting on investments for the foreseeable future.
danuker 4y ago
You can get ROIs better than the stock market. Some examples are education, and if you own a home, an energy audit.
zaroth 4y ago
Inflation is a good reason why long term capital gains rates are lower than income tax rates. You can argue about the timeframe and getting the whole break after 1 year versus maybe giving larger breaks the longer you hold, but that’s the weeds.
- nemo44x 4y ago
  Principal should be adjusted for inflation. If I invest $10k and the investment is worth $11k today but we’ve experienced 10% inflation in that time then my actual profit is 0 and I should pay no tax on the $1k of proceeds.
  - pessimizer 4y ago

jl2718 4y ago

This period has been very special because of the 401k, which is itself part of the growth story of the corporate legal structure. I think this is coming to an end. Corporate boards and officers no longer represent the best long-term interests of the companies and shareholders they represent. It’s also a very precarious legal status as an arbitrary judicial ruling can make or break a company. Finally, and perhaps most importantly, the corporate bubble is based on arbitrary tax codes that both advantage corporations and push worker savings into the stock market. Even if these conditions continue unabated, the cash flows from working class into the stock market will eventually hit equilibrium with capital extraction from the owner class. If the extractions return to the same markets, then things stay in equilibrium. They won’t, however, because the tax advantaged assets are different for them. They may seek hyper-volatility, or government bond shelters, but will generally avoid the assets on the working class tax treadmill. There are fundamentals to financial assets that have nothing to do with “number go up”, and these will ultimately dictate reality, with the caveat that “the markets will remain irrational longer than you will remain solvent”. Rationals get wrecked too, except every once in a while when one gets lucky on their timing and makes so much money that they become a hero and we make movies about them. We cheer because it gives us hope that our intuition will serve us too. Unlikely. This is all to say that such charts are using an inductive hypothesis to predict an inherently anti-inductive phenomenon. People tithe and sacrifice to their church for a promise of rewards in the afterlife. The stonk religion is the same; well worth the price for your peace of mind. True or not, you’d be a mess without it.

mistrial9 4y ago
> People tithe and sacrifice to their church for a promise of rewards in the afterlife. could you strengthen your argument by omitting casual broad-brush explanations of religion, please?
- jl2718 4y ago
  Well, I can't anymore, but, I might have instead said something about how religion is commonly maligned for such practices. This is only to show that modern investment practices bear strong elements of ritualistic faith. Your response is most welcome. Thank you.

kurthr 4y ago

What I like most about this is the logarithmic plot of prices. That makes multiplicative % return a constant size and allows for easy representation of exponential growth.

01100011 4y ago

Aren't dividends taxed? If so, you should have a way to set the tax rate for them so folks can evaluate performance in a taxable account vs tax free.

ricksunny 4y ago

Do you capture the effects of a ticker symbol delisting from the index? Trivial for a single stock of course, but looking across a portfolio, then the effects from delisting from an index, new listings into the index, stock splits, and M&A inevitably becomes a thing.

icu 4y ago

So you used CPI as your inflation measure? I personally don't think CPI or RPI is a good inflation yardstick, because the calculations change over time. For consistency I would suggest you try Shadow Stats or the year on year growth of the M2 money supply.

imtringued 4y ago
Shadowstats doesn't know how exponential growth works. The people who believe in shadowstats don't understand it either.
- icu 4y ago
  I'm not sure I see the link between understanding exponential growth and Shadow Stats? Shadow Stats holds the CPI definition constant over the time period, whereas Uncle Sam jukes the CPI however way he's feeling for "reasons". The reason why I suggested Shadow Stats was that it seems like compumike is trying to show the change in purchasing power over time with https://totalrealreturns.com/ https://totalrealreturns.com/. It's a fantastic idea trying to make the concept of the time value of money, and purchasing power more accessable to the masses. It probably took a lot of work and I appreciate the effort. Imho the correct way to do this is to hold as many variables constant over the timeseries. My point is that since official CPI isn't constant, and imho a bad measure of inflation anyway, using M2 or Shadow Stats woudl be the better way to go.

imtringued 4y ago

This is offtopic but I am tired of pretentious people. The money supply must grow exponentially because liquidity premiums aka interest payments. You can now either choose to eliminate liquidity premiums and hence abolish inflation and exponential growth in the money supply or you can choose to have inflation and an exponentially growing money supply with endless increases in public debt. The fact that if the money supply is $100 and 2% interest must be paid which is then subsequently reinvested for compounding obviously requires the economy to keep track of $102. Hence compound interest which is caused by liquidity premiums results in a perpetual increase in the money supply. The fact that governments must borrow money is purely how we decided to run the system right now. You could in theory do helicopter money as well and it would amount to the same. Now, since positive interest rates result in an increase in the money supply, reducing the money supply requires the opposite, i.e. negative interest rates. Negative interest rates don't exist because of cash. That is the only reason. People don't want negative interest rates because they actually love the illusion of earning compound interest and subsequent inflation which cancels out the interest. People criticise inflation while simultaneously criticizing negative interest rates, the height of hypocrisy. After all, if you implement negative interest rates a while lot of people will have to work instead of living off the work of others. They say that it is unfair to not turn other people into debt slaves, while simultaneously criticizing how unjust it is, that their dreams of turning other nations and future generations into debt slaves is disrupted by so called defaults and debt restructuring. They yell out debt is bad while secretly desiring to have debt slaves of their own.

mensetmanusman 4y ago
The money supply must grow because of population increase. Population was almost exponential growth in the last century, but now it has essentially stopped so we are entering a new paradigm. The stock market under a declining population will be fascinating to watch.
- bushbaba 4y ago
  Automation will allow us to produce more with less people resources leading to increased consumption per capita of goods and services letting the game continue. Population decline will not be kind to society without AI/Robotics to take care of us.

uoaei 4y ago

A tip: define what "drawdown" means on the page itself.

aagha 4y ago

This is really cool, but it would be more useful (IMO) with the following changes: - Have all comparisons start at 0 - Ditch the log scale

anonu 4y ago

Most stock time series are corporate action adjusted when displayed on a chart. So even if they are in dollars they will reflect total return.