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6.5. Risk and Reward

The Risk / Reward tab draws one chart, Allocation vs Return, with a dot for each open position:

  • across, its return since purchase, as a percentage of what it cost,
  • up, its allocation: the amount invested in it as a percentage of your capital,
  • and its colour, which follows its return, from red for the largest losses to green for the largest gains.

Larger positions sit higher. So the chart shows at a glance where your money is concentrated, and how those concentrations have fared. Figure 6-5 shows it for our example.

Analytics · Risk / Reward

Allocation vs Return

Open positions · colour follows return

-100%0%100%200%300%400%500%0%2%4%6%Return since purchaseAEROFLEXMAMATATIILVENUSREM

Up: allocation (% of capital)

Figure 6-5: Allocation against return for the example's 24 open positions

Every position in our example holds between 2% and 5% of its ₹50 lakh capital. Fourteen of the 24 sit to the right of zero, at a gain, and ten to the left. Furthest right is VENUSREM, bought once in February 2025 at ₹317.70 and now at ₹1,650.70, a gain of 419.6%. The chart names it with AEROFLEX, the two highest returns, and MAMATA and TIIL, the two lowest.

A line across the chart marks the largest allocation you allow yourself in one position. You set that figure as Max position, under Plan → Primitives → Thresholds, which we meet in Chapter 10. The chart names every position above the line, and the two with the highest and the two with the lowest return.

Allocation is measured against your capital, so the chart needs a capital amount. Without one, the tab reads Set your total capital in Settings to see allocation. You can set the capital in the summary bar, as we saw in section 4.1.

Summary​

In this chapter, we read the portfolio's numbers. We:

  • read the panel above every Analytics tab, for closed positions, open positions and the quality of the companies held,
  • measured the return in more than one way, and saw why time-weighted and money-weighted returns differ,
  • looked at results month by month in Habits,
  • grouped the portfolio by sector, size, label and broker,
  • and set allocation against return.

Numbers show patterns. Your reasons for each trade are what explain them, and that is where the Journal comes in. Chapter 7 covers it in full.