In brief

I cannot tell whether Lychee’s Tail worked by looking only at the account balance. Deposits can make a losing portfolio grow in dollars, while withdrawals can make a successful portfolio look smaller. I therefore separate external cash flows from investment results and keep allocation changes as dated decisions rather than silently rewriting the original model.

This article explains the measurement process. It does not publish or invent my private contribution history.

Balance growth has two components

The basic reconciliation is:

Ending balance = beginning balance + net contributions + investment gain or loss

If an account begins at $10,000, receives a $2,000 contribution, and ends at $12,500, the arithmetic investment gain is $500. That $500 is not automatically a 5% return because the contribution’s timing matters.

The two returns answer different questions

Time-weighted return divides the measurement period around external cash flows and links the subperiod returns. It is designed to reduce the effect of when money enters or leaves. I use it when asking how the allocation itself behaved.

Money-weighted return incorporates the size and timing of cash flows. It is an internal-rate-of-return calculation and describes the investor’s experience more directly. A large deposit before a decline can make it much lower than the time-weighted result.

Neither measure is a substitute for the other. The site’s portfolio charts are modeled time-series comparisons with target weights restored monthly; they are not my brokerage statement and do not include my actual deposits, taxes, or trades.

A simple example

Consider two six-month periods:

  1. The portfolio rises from $10,000 to $11,000, a 10% return.
  2. I add $9,000, bringing the balance to $20,000. The portfolio then falls 5% to $19,000.

The linked time-weighted result is (1.10 × 0.95) − 1 = 4.5%. My dollar experience is different because much more money was exposed during the losing period. A money-weighted calculation uses the exact dates and amounts to capture that difference.

My change log

For each intentional target change, I record:

  • the effective date;
  • the old and new target weights;
  • whether the change came from new evidence, a changed objective, or implementation constraints;
  • the source material reviewed;
  • expected benefits and failure modes;
  • tax or transaction consequences considered before trading.

I do not alter an old target merely to make the historical chart look better. If a future version adds an energy sleeve or changes a technology tilt, that becomes a new dated version.

What counts as evidence

A rising recent chart is not enough. I look for a stable portfolio role, transparent index or fund methodology, costs, diversification, overlap, tax fit, and a reason the expected exposure should persist. I also write down what would make me reverse the decision.

That discipline comes directly from how I approached finance coursework in my iMBA: define the question, separate assumptions from observations, compare alternatives on the same basis, and document uncertainty.

What this series now covers

Bottom line

I judge Lychee’s Tail against a written allocation and consistent calculation rules, not against whichever benchmark or start date makes it look best. Separating contributions, market growth, allocation changes, and benchmark results keeps the record useful even when the portfolio underperforms.

Sources