Objectively Evaluating Your Portfolio

Rate of Return

This is the rate you need to make on your portfolio in order to not lose purchasing power after subtracting your expenses, taxes, and cost of living increase.

Standard Deviation

This is a statistic that measures how much risk you are taking versus your return. The lower the number, the better.

Variance Drag Phantom Tax

This ratio calculates the degree of your standard deviation in proportion to your rate of return. Ideally, it will be at 0.8 or less. Anything over 1.5 is not acceptable.

Sharpe Ratio

You want this to be 1 or higher on your entire portfolio. Anything at 0.5 or less is unacceptable.

Probability of Any Loss in the Next 12 Months

This is the probability that your portfolio will experience any loss during the next 12 months. It should be 15% or less.

Amount of Money at Risk in the Next 12 Months

Based on historical data, this identifies how much money is at risk.

Upper and Lower Return

You want this range of returns to be as narrow as possible.

Correlation to S&P 500

This shows the movement of one investment or index in relation to another. The scale is between +1 and -1.