This graph displays the value gained by the portfolio versus time. Gain since the starting graph date (inclusive) is plotted. Gain is calculated as the portfolio value minus the out of pocket investment (cost). 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 used in the gain calculation. With the historical cost mode enabled, the gain for the entire history of the portfolio is plotted. With the current cost mode enabled, the gain of only the currently held shares is plotted. This is the equivalent of plotting the change in space between the value and cost lines on the Portfolio Cost - Value Graph. You may wish to look at the gain in the historical cost mode to see how well you are doing for the life of the portfolio, and look at the gain in the current cost mode to see how well you are doing for the remaining balance of 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 cost is 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 cost is 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. At $11/shares, your gain in the historical cost mode would then be $100 ($50 that you made on the sold shares, plus the $50 you are ahead on the unsold shares), where as in the current cost mode your gain would be $50 (which is just the $50 you are ahead on the unsold shares). Continuing this example even further, if the price went up to $12 share while you still owned the 50 shares, your gain in the historical cost mode would be $150 (the $50 gain from the sold shares, plus the $100 you are ahead on the unsold shares), where as in the current cost mode, your gain would be $100 (the $100 you are ahead on the unsold shares). The gain for the entire portfolio is calculated by summing the gains from each individual investment.
The vertical axis is value gained. 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 PORTFOLIO GAIN-H or PORTFOLIO GAIN-C in either historical (-H) or current (-C) cost mode. The ending gain value displayed on the legend will be labeled with G: (Gain). The change in gain from the previous day is displayed in parenthesis.
The percentage displayed along the right axis of the Gain graph is the gain divided by the market value on the beginning graph date. This is the % gain, relative to the starting market value.