What does the Inflation Adjusted toggle do?
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, not seasonally adjusted), measured month over month.
How recent and missing months are handled
The CPI is published with roughly a one-month lag, so the newest month in the data usually has no official print yet. Rather than treating those months as having no inflation at all, DMS carries the last known CPI value forward. This is conservative - month-over-month CPI is small and slow-moving - and it keeps the inflation-adjusted view from visibly diverging from nominal returns at the right edge of every chart. When the official figure is published, it replaces the carried-forward value automatically.
The same carry-forward fills any gap in the historical record, though those are rare. The one case where returns are left nominal is a month that precedes the earliest CPI value on file, since there is nothing to carry forward from.
The current month
Mid-month, there is no CPI figure for a month still in progress, so the month-to-date return is deflated using the most recent CPI available as a stand-in. The day-over-day figure is left nominal - a single trading day is too short a horizon for an inflation adjustment to mean anything.
A few other 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.
- The risk-free rate used inside Sharpe, Sortino, and the Ulcer Performance Index is deflated along with everything else, so risk-adjusted figures stay internally consistent rather than mixing a real return against a nominal benchmark.
- 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.