Equity curve misleading

Hi Matthew
Just a quick comment on the equity curve you use for each stock trading system.

Does not reflect dividends and therefore misleading.

We are long 5 iShares ETFs which all went ex-div yesterday. You’re equity curve shows a loss overall, but infact the positions made money yesterday, on an adjusted close basis (which reflects the dividends). I realise you will add the dividends to the system after the record date, but as they say, perception is reality, and to the uninformed viewer, the system will look to have performed badly when in fact has done well.

This is not good for us, or you, or your users.

Having said that I do not have a suggestion to avoid this issue!


That is incorrect. We do include dividends in the equity.

Hi Matthew

OK here is an example. We are long 478 EWH at 20.91. The current price is 20.81. You are showing a “P&L” of -$48 and i presume this figure is included in the equity curve with our other positions. However, this stock paid a dividend of 54cents yesterday, so we are actually in profit $210 (aprox).

Peter: Dividends are added to your Model Account’s cash on the pay date (not the ex-dividend date). You won’t see them added to a single position’s profit-loss, but they will be added to your Model Account cash. You can see itemization of all dividends paid by clicking the magnifying glass in the upper right of your system’s main chart.

Hi Matthew - Yep I realise dividends are added on the pay date. :slight_smile:
That’s exactly my point - the equity curve reflects the capital loss from the ex-div date price drop, only recovering that loss when the div is paid on pay date. My equity curve is getting hammered because all my stocks went ex-div yesterday (iShares ETFs all on same day). The reality is, on an adjusted basis, the portfolio made money yesterday, but your equity curve shows we got hammered. If you’re aim is to make it easy for investors to find good systems - this problem will not help. Just saying! :slight_smile:

My aim is to make stuff work like real life. This is how real life works. You get the cash on the pay date. Your marked-to-market account value drops before then.