This is what you get: a five-year report for a made-up portfolio, compared with the S&P 500, the Dow Jones and the NASDAQ.
The portfolio and its numbers are invented; the market figures are real. Your reports are built the same way from your own monthly statements. Download the PDF to see the printed version.
Every bar chart on a report gets a letter grade, like a school report card: Account Life, each shorter period and
each calendar year. It compares your account's return over that period with the average return of the indexes
you chose for the portfolio (one to three).
Grade
Your account vs. the index average
A+
+5% or more
A
+3% to +5%
A−
+2% to +3%
B+
+1% to +2%
B
0% to +1%
B−
0% to −1%
C+
−1% to −2%
C
−2% to −3%
C−
−3% to −4%
D
−4% to −6%
F
worse than −6%
I
Incomplete: a period under 3 months
Under 3 months (three monthly balances or fewer, such as this year's chart in January or February), the
grade is I (Incomplete): a few weeks of returns say little about how an account is managed.
3 to 12 months: the account's total return for the period is compared with the indexes'.
12 months or more: the yearly (annualized) returns are compared.
Matching the market earns a B. An index fund gets the market's return at very little cost, so it takes
beating the market to earn an A.
Your account's return and the index returns are measured differently, so treat the comparison as a guide, not an exact match:
Deposits and withdrawals. Your return accounts for when you added or took out money. The index returns don't:
they show how each index moved from the start to the end of the period. If you added money just before the market
rose or fell, your return and the index returns can differ for that reason alone.
Dividends and interest. Each index is measured with a fund that tracks it, such as SPY for the S&P 500,
DIA for the Dow Jones, ONEQ for the NASDAQ and AGG for US bonds. Like your account, the fund's return includes the
dividends and interest it received. See how each one has done lately on
Index returns.
Fees. Your return is after any fees you paid. The funds' returns are after their own fees, which are small
(about 0.1–0.2% a year).
What the account holds. Stock indexes rise and fall more than an account that also holds bonds or cash. For a
mixed account, compare it with US Bonds (AGG) as well as a stock index, or keep in mind it's built to move less than either.
Reports show past results only. They are not investment advice or a recommendation about any investment or money manager.
Index returns run from the start to the end of each period and don't reflect when you added or withdrew money. Each index is measured with a fund that tracks it (such as SPY for the S&P 500), including its dividends, after the fund's small fees. Compare an account holding bonds or cash with a bond index or a mix of indexes. The grade is based on this comparison. For information only, not investment advice.
