Portfolio visualizer: backtests, allocation and what the charts really mean
A portfolio visualizer backtests an asset mix against historical returns to show growth, drawdowns and volatility. It is useful for comparing allocations, not for predicting returns — past sequences never repeat exactly.
What a portfolio visualizer shows
- CAGR: the annualised growth rate over the period tested
- Maximum drawdown: the worst peak-to-trough fall, the number that decides whether you can hold on
- Standard deviation: how much the portfolio bounces year to year
- Correlation: whether your holdings actually diversify each other
How to read a backtest without fooling yourself
Any allocation can be tuned to look brilliant on one historical window. Test several start dates, include 2000–2002, 2008 and 2022, and check whether the result survives all of them.
Costs matter more than the chart suggests. A 0.9% expense ratio compounded over 30 years takes a large share of the final balance, and backtests often ignore taxes entirely.
Model your own allocation
Use the asset allocation calculator to set a stock, bond and cash split against your age and risk tolerance, then compare it with the historical drawdowns above before committing.
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FAQ
What is a portfolio visualizer?
It is a tool that applies historical asset-class returns to a chosen allocation and charts growth, volatility and drawdowns so you can compare mixes on a like-for-like basis.
Are backtests reliable?
They describe the past accurately and predict the future poorly. Use them to compare risk profiles between allocations, not to forecast returns.
What is a good stock and bond split?
A common starting point is 110 minus your age in stocks. What matters more is picking a mix whose worst historical drawdown you could hold through without selling.
How often should I rebalance?
Once a year, or when an asset class drifts more than five percentage points from target, is enough for most investors.
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