PortfolioVisualizer added inflation adjustment

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nisiprius
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PortfolioVisualizer added inflation adjustment

Post by nisiprius »

I have no connection with PortfolioVisualizer other than thinking it's a very useful tool and using it all the time. Well, I have one other connection with them. Some weeks ago I sent them an email saying I thought it would be nice if they offered the option of correcting for inflation in the "backtest portfolio" screen... and they have. Nice.

http://www.portfoliovisualizer.com

For an example of a screen with an "inflation adjusted" checkbox:

Example
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
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snowshoes
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Re: PortfolioVisualizer added inflation adjustment

Post by snowshoes »

Sweet, thanks for all your efforts & input Nis!
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bertilak
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Re: PortfolioVisualizer added inflation adjustment

Post by bertilak »

nisiprius wrote:I have no connection with PortfolioVisualizer other than thinking it's a very useful tool and using it all the time. Well, I have one other connection with them. Some weeks ago I sent them an email saying I thought it would be nice if they offered the option of correcting for inflation in the "backtest portfolio" screen... and they have. Nice.

http://www.portfoliovisualizer.com

For an example of a screen with an "inflation adjusted" checkbox:

Example
About that inflation adjustment. Shouldn't it be the STARTING number that is adjusted, not the ending number? It seems that an inflation adjustment should not have any effect on the actual, known, current value. We can't say that today's value is somehow less than what we actually, in fact, know it to be.

Adjusting the starting value will tell us what that initial investment was worth in today's dollars.

EDIT: Perhaps I am looking at the chart backwards. Should the starting value, on the left hand side of the chart, be looked at as TODAY's value and the right hand side be some time in the future? Except the chart shows 2011 (past) through 2017 (today).
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