This graph overlays the portfolio value with the out of pocket investment. This out of pocket investment can be either the cost of the currently owned shares, or the historical cost of the portfolio. The menu command Graphs / Options / Historical Cost controls which type of cost is plotted. This graph allows you to see graphically the current portfolio value with the break even point. With the historical cost mode enabled, this is the break even point for the entire history of the portfolio. With the current cost mode enabled, this is the break even point of only the currently held shares.
The historical cost is the net sum of money that has come out of your pocket over the life of the portfolio. The historical out of pocket investment is calculated by adding all purchases, subtracting all redemptions, and subtracting all received distributions. The purchases only include out of pocket purchases, not reinvested distributions. The received distributions only include distributions paid to you, not reinvested distributions. This calculation shows the break even point on your invested money for the full history of the portfolio. The historical out of pocket investment is calculated with the formula:
out_of_pocket_investment = purchases - redemptions - received_distributions
The current cost is the net sum of money that has come out of your pocket in order to acquire the shares currently held in the portfolio. The current out of pocket investment is calculated by adding up the cost to purchase all the currently owned shares, and subtracting off any received distributions from the currently owned shares. The first in first out method is used for determining this cost. The purchases only include out of pocket purchases, not reinvested distributions. The received distributions only include distributions paid to you, not reinvested distributions. This calculation shows the break even point on your invested money for the remaining balance of shares currently held. The current out of pocket investment is calculated with the formula:
out_of_pocket_investment = latest_purchases - received_distributions
An example will help clarify this historical/current cost option. Suppose you started a new investment by buying 100 shares at $10/share for $1,000. After this transaction your out of pocket cost for this investment is $1,000 in either cost mode. If you then sold 50 of these shares at $11/share for $550, your cost for this investment in the historical mode would be $450, and in the currently owned shares mode it would be $500. The cost for the entire portfolio is calculated by summing the costs from each individual investment. You may wish to look at the historical cost to see how well you are doing for the life of the portfolio, and look at the current cost to see how well you are doing for the remaining balance of shares.
The vertical axis is cost and value. The horizontal axis displays the date. If auto scaling is on, the vertical axis automatically scales to cover from the minimum to the maximum value achieved during the displayed period. The top vertical axis label will specify the maximum, and the bottom vertical axis label will specify the minimum achieved during the displayed period.
The graph will be labeled with PORT C-VAL-H or PORT C-VAL-C to stand for Portfolio Cost - Value in either historical (-H) or current (-C) cost mode. The ending portfolio value displayed on the legend will be labeled with V: (Value). The ending out of pocket investment will be labeled with C: (Cost). The change in these values from the previous day is also displayed in parenthesis.
Comments: This graph allows you to see graphically the current value and the break even point. The out of pocket investment only changes after a purchase, redemption, or received distribution. The out of pocket investment may actually go negative in the historical cost mode if you have redemptions plus received distributions totaling more than the sum of all purchases.