Frequently Asked Questions

When the Inflation Adjusted toggle is enabled, every monthly return shown is converted from a nominal return to a real return - what you actually gained in purchasing power after consumer prices rose that month.

The conversion uses the standard formula:

real return = (1 + nominal return) ÷ (1 + monthly CPI change) − 1

Inflation data comes from the BLS CPI-U (Consumer Price Index for All Urban Consumers), measured month over month. Because the CPI is published with a roughly one-month lag, the most recent month carries forward the last known CPI value until the official print arrives - an approach that avoids guessing.

A few things to know:

• The toggle is global: equity curves, CAGR, drawdowns, detailed metrics, savings and withdrawal projections - everything recomputes in real terms. A hint appears under the controls ("Showing real (inflation-adjusted) returns") so you always know which mode you're in.
• Months with no CPI data available are left unchanged rather than estimated.
• The setting is preserved in the page URL, so a shared link reproduces exactly what you were looking at.

Why use it? Long backtests can flatter a strategy: a 10% nominal year during 8% inflation only grew your purchasing power about 2%. Real returns are the honest yardstick for long-horizon planning, especially for withdrawal-rate analysis.

Strategy results which ignore trading costs overstate what you would have actually earned. The Trading Friction toggle (on by default) deducts an estimated cost from each month's return based on how much the strategy actually traded that month.

The model is turnover-weighted. Each month, the strategy's new target ETF weights are compared against what it was already holding as the month opened. The sum of the absolute weight changes is the turnover, and each traded slice is charged a one-way cost based on the ETF's leverage:

So a month that rotates 50% of the portfolio out of one 1× ETF and into another costs roughly 0.10% (10 bps on the 50% sold + 10 bps on the 50% bought). Leveraged ETFs are charged more because their wider spreads and higher trading impact make them costlier to trade in practice.

Holdings that are left alone still move. This is the subtle part, and it is why the comparison is against what the strategy was holding rather than against last month's published percentages. If you hold 50% stocks and 50% bonds and stocks gain 10% while bonds are flat, you are holding roughly 52.4% / 47.6% a month later without having placed a single trade. Those percentages changed, but nothing was bought or sold and nothing was owed to a broker.

Two consequences follow:

• A month spent holding costs nothing, even though the published allocation percentages moved. Strategies that deliberately let positions run - buy-and-hold portfolios, and the drift-band strategies that only trade once a position wanders outside its band - are charged only in the months they genuinely trade.
• Rebalancing back to an unchanged target is not free. Returning that 52.4% / 47.6% portfolio to a 50/50 target means actually selling stocks and buying bonds. The target looks identical to last month's, but real money moved, and friction is charged accordingly.

Other points:

• The toggle is global - it flows through every view, chart, metric, and calculator, including benchmarks.
• Benchmarks with a known, fixed composition (currently the 60/40) are modeled as annually rebalanced: weights start at the target mix each January (and at inception), then drift with the underlying ETFs' actual returns the rest of the year. Only the January reset generates turnover, so these benchmarks see a small, once-a-year friction cost rather than a monthly one. Single-asset benchmarks like the S&P 500 have no allocation to drift or rebalance, so they see none.
• Imported strategies supply monthly returns only, never allocations, so there is no honest way to estimate their trading costs. Whenever an imported strategy is on either side of a comparison the toggle is disabled, keeping both sides on the same footing.
• The setting is preserved in the page URL, so shared links reproduce your configuration.

If you want to see the "frictionless" academic version of a backtest, switch the toggle off - just remember nobody earns those returns in a real account.

Monthly rotation strategies generate realized capital gains, and in a taxable account those gains get taxed. The Taxable Account toggle estimates after-tax returns so you can see how a strategy holds up once the IRS takes its share.

When you enable it, a settings dialog collects:

• Filing status — Single, Married Filing Jointly, or Head of Household
• Taxable income (excluding strategy gains) — used to find your marginal brackets
• An optional manual override if you'd rather enter your own short-term and long-term rates directly (useful for adding state taxes)

From your filing status and income, your marginal ordinary-income rate (applied to short-term gains) and your long-term capital-gains rate are used based on the 2025 federal brackets, and adds the 3.8% Net Investment Income Tax when your income exceeds the NIIT threshold ($200K single/HoH, $250K MFJ).

How the tax is applied:

1. Each strategy has a historical LT Gains % - the share of its realized gains that qualified for long-term treatment, taken from its Tax Efficiency analysis (see the Tax Efficiency FAQ).
2. Your ST and LT rates are blended in that proportion into a single effective rate.
3. For each calendar year with a net positive return, the year's gain is reduced by the blended rate. Years with losses are left untouched (no tax on losses).

A few caveats worth knowing:

• This is an estimate, not tax advice. Real-world results depend on your full tax picture, loss harvesting, and timing.
• Strategies with less than 12 months of history can't yet establish an LT Gains % and are left untaxed.
• The model does not include fund yields or distributions, which can add to the actual tax bill.
• Like the other toggles, it's global across all views and preserved in the page URL.

Use the ⚙ button next to the toggle to revisit your settings at any time.

The Tax Profile (Est.) panel in the Strategy View's Return Statistics shows how tax-friendly a strategy's trading actually is - how many of its realized gains qualified for long-term capital-gains treatment versus being taxed as short-term gains at ordinary income rates.

Rather than guessing from turnover, we run a realization-based simulation of what a real account would have done:

1. Each month's target weight changes are converted into actual sales (when a position's drifted value exceeds the next month's target) and buys (when it's lower).
2. Every sale's realized gain is computed as sold value minus cost basis, using the average-cost basis method across that ticker's accumulated shares.
3. Each realized gain is classified by holding age: short-term if held under 12 months, long-term if 12 months or more.
4. At the end of the selected window, any remaining positions are bucketed as if liquidated that day, classified by their current age.

The panel reports, for the date range you've selected:

• ST trades / LT trades - counts of short- and long-term realizations
• ST / LT avg hold - average holding period in months for each bucket
• ST / LT gross gain - total realized gains in each bucket
• LT Gains % - the headline number: the share of all realized gains that were long-term

A higher LT Gains % means more of the strategy's gains get the favorable long-term rate. This percentage is also what the Taxable Account toggle uses to blend your short-term and long-term tax rates when estimating after-tax returns - so the two features share one consistent model.

Two limitations to be aware of:

• The panel needs at least 12 months of allocation data in the selected range to classify gains; with less it shows "Not enough data" rather than a misleading number.
• Blended (custom) portfolios are analyzed from their net ETF weights. When two sleeves trade the same ticker in opposite directions, those offsetting trades net out and may be under-counted, so blended results are a slight approximation.