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Calculate and Track Your Portfolio Wealth Index

The WealthIndex function in MarketXLS allows you to calculate how an initial investment grows over a specified period, based on a defined portfolio. It helps you see how your selected stocks, bonds, or ETFs perform together, translating returns and volatility into a single cumulative growth figure. By specifying your initial amount and time horizon, you can adaptively measure how well your investments would have grown over time, all conveniently displayed within Excel.

Why Use This Function?

  • Effortless Portfolio Growth Tracking
    Measure how much an initial investment in your portfolio would have grown over any period.
  • Explore Different Investment Durations
    Adjust the time period (in months) to see short-term vs. long-term performance trends.
  • Customizable Initial Amount
    Test hypothetical investments (e.g., $5,000, $10,000, or $50,000) and compare how their growth rates differ.
  • Instantly Refreshing Data
    Directly pull data into Excel cells with minimal setup and automatic updates.
  • Identify Top vs. Underperforming Allocations
    By examining portfolio wealth growth over time, easily spot and adjust weightings.
  • Validate and Compare Strategies
    Quickly compare two portfolios or strategies by toggling parameters.

How to Use in Excel

WealthIndex([portfolio], [period], [initialAmount])
  1. In Excel, select a cell where you want your Wealth Index result displayed.
  2. Enter the function =WealthIndex() and pass in your portfolio, period (in months), and initial amount arguments where needed.
  3. Press Enter. Your Wealth Index table or result will output in Excel cells.

Note: In practice, the function name will return "WealthIndex" in the formula cell, while the underlying data is populated through ExcelHelper.PrintDataTable.

Parameters Explained

Parameter Description Example Values Notes
portfolio Dictionary or reference defining stocks and weight allocations (e.g., {"AAPL": 0.5, "MSFT": 0.5}). {"AAPL": 0.5, "MSFT": 0.5} Ensure the total weight sums to 1. A maximum of 500 tickers is allowed.
period (Optional) Number of months in the past to include when calculating the wealth index. 12, 24, 36 Defaults to 12 if not provided. Must be an integer.
initialAmount (Optional) The starting investment capital. The wealth index calculation will assume you invest this total amount. 10000, 5000 Defaults to 10,000 if not provided.

• If no parameters are specified, the function uses a default period of 12 months and an initial amount of $10,000 for your portfolio.
• If the portfolio references are invalid or empty, the function returns an error message or "NA."

Example Usage

Basic Examples

  1. Minimal Parameters (Defaults Applied)
    In a blank cell, type:
    =WealthIndex(A2)
    Where cell A2 contains a predefined portfolio in JSON-like format (or a named range referencing it). MarketXLS will assume a 12-month period and a $10,000 initial investment.

  2. Specifying Period Only
    =WealthIndex(A2, 24)
    This calculates the wealth index for 24 months using $10,000 as the starting investment.

  3. Specifying All Parameters
    =WealthIndex(A2, 36, 5000)
    Assumes a 36-month period with a $5,000 initial investment. This can illustrate how a smaller or larger initial amount changes overall growth.

Advanced Scenarios

• Multiple Ticker Allocation
=WealthIndex(A2, 24, 25000)
Where A2 might contain {"AAPL": 0.3, "AMZN": 0.4, "TSLA": 0.3}. This reveals the cumulative value if you had invested $25,000 across these weights for two years.

• Testing Varying Periods
Typically, you might place =WealthIndex(A2, B2, C2) in one cell and replicate it for multiple rows each referencing different months or starting amounts. Compare and track how short-term vs. long-term wealth accumulates.

• Handling Missing or Low-Data Tickers
If part of your portfolio has incomplete data or non-tradable symbols, the function may adjust weights or return an error message. Use this scenario to see how your diversified portfolio still performs when lesser-known tickers are dropped.

• Integration with Other Functions
Combine WealthIndex with other MarketXLS metrics like Sharpe() or Drawdowns() in separate cells to get a well-rounded performance overview.

Common Questions and Troubleshooting

  1. “Why do I only see ‘WealthIndex’ in the cell instead of the wealth data?”
    – The function’s return text will always be “WealthIndex” if successful. The actual wealth index data is printed or refreshed in the surrounding Excel cells. Scroll or check adjacent cells for the results table.

  2. “What happens if my portfolio doesn’t add up to 1 (100%)?”
    – The backend attempts to normalize the weights. If the total is erroneously high or low, the system adjusts. Ensure you aim for a combined ratio of 1.0.

  3. “Why am I seeing ‘NA’?”
    – Either your license is invalid, your portfolio has invalid tickers, or there was an internal calculation error. Verify ticker symbols, license status, and parameter format.

  4. “Can I use fractional or decimal amounts for the initial investment?”
    – Yes. Provide a decimal value such as 5000.75 if desired.

  5. “Can I track more than 500 symbols at once?”
    – This function enforces a 500-ticker limit. Use separate function calls if you need additional coverage.

By following these guidelines and examples, you can easily measure how your portfolio’s starting balance would have grown over any time span—directly in Excel. Try different period lengths, starting amounts, and portfolio compositions to better understand your investments, refine your strategy, and stay ahead in the market.

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MarketXLS Excel Add-in Tutorial - How to Use Wealth Index and Other Financial Formulas
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