Cumulative v discrete performance

adamcartney

Apologies for this very "beginner" question but I've not been able to find an answer elsewhere online.

When reviewing funds etc, I find that research websites often show a line graph showing cumulative performance and a bar chart showing discrete performance. Could you please explain the difference between discrete and cumulative performance and which is more important?

Thanks

Linton

Cumulative is over the previous n years. It shows overall performance. It can be misleading if a fund is well performing over 1, 3 and 5 years - perhaps year 1 (12 months to date) was unusually good as it appears in all 3 figures and the other years less good.

Discrete performance is over individual years. Useful for checking consistency. This can be by calendar year or by 12month periods up to now.

Kendall80

adamcartney wrote: »

Apologies for this very "beginner" question but I've not been able to find an answer elsewhere online.

When reviewing funds etc, I find that research websites often show a line graph showing cumulative performance and a bar chart showing discrete performance. Could you please explain the difference between discrete and cumulative performance and which is more important?

Thanks

Cumulative = year on year gains.


Discrete = gain in each 'discrete' period - usually 1 year at least on my platform.