Source: https://wealthfolio.app/docs/glossary/ # Investment Terms Glossary Plain-English definitions of the investment and portfolio-accounting terms used in Wealthfolio — TWR, MWR, FIFO, ACB, cost basis, drawdown, and more. * * * Last updated September 10, 2026 A short reference for the terms used across Wealthfolio’s app and docs. Use it when a metric or concept is unfamiliar — every entry links out to the deeper concept doc where applicable. * * * ## Performance & returns ### TWR — Time-Weighted Return The return of your underlying investments with the impact of contributions and withdrawals stripped out. Comparable to a benchmark (e.g. SPY). Wealthfolio shows TWR at the **total portfolio** level by default. See [Performance Metrics](https://wealthfolio.app/docs/concepts/performance-metrics/). ### MWR — Money-Weighted Return The return of _you as an investor_ — includes the impact of when you bought and sold (timing decisions). Equivalent to the IRR of your cash flows. Wealthfolio shows MWR at the **per-account** level by default. ### Modified Dietz A simplified MWR approximation that’s faster to compute and stable across daily recompute. Wealthfolio uses Modified Dietz under the hood for per-account return. ### Realised gain / loss The profit or loss locked in when you sell. Computed as proceeds minus the cost basis of the lots closed by the sale. ### Unrealised gain / loss The on-paper profit or loss on positions you still hold — current market value minus cost basis. Becomes realised when you sell. ### Drawdown The peak-to-trough decline of your portfolio over a period, expressed as a percentage of the peak. Useful for sizing how rough a downturn was. ### Maximum drawdown (Max DD) The largest drawdown observed over the whole period being analysed. ### Volatility The standard deviation of returns over a period. Higher numbers = bumpier ride. Wealthfolio computes daily volatility and annualises it for reporting. ### Annualised return A return rate normalised to a one-year period, so 3-month, 5-year, and YTD returns can be compared apples-to-apples. ### Benchmark A reference portfolio (often a broad index like SPY or VTI) you compare your own return to. Lets you ask “did I beat the market?” * * * ## Cost basis & lots ### Cost basis What you paid for a position, used to compute realised gain/loss when you sell. In Wealthfolio, cost basis is tracked at the **lot** level. ### Lot A single unit of cost basis — usually one BUY, explicit Sell Short, DRIP, staking reward, or transferred-in position. Selling or covering closes lots in FIFO order. See [Cost Basis & Lots](https://wealthfolio.app/docs/concepts/cost-basis-and-lots/). ### FIFO — First In, First Out The lot-selection method Wealthfolio uses: when you sell, the oldest lot is closed first. The default in most jurisdictions; matches what your broker typically reports for tax purposes. ### LIFO — Last In, First Out An alternative cost-basis method (sell the newest lots first). Used in some US tax strategies. Not yet supported in Wealthfolio; planned for a future version. ### ACB — Adjusted Cost Base Canadian tax accounting’s term for the weighted-average cost per share. Not natively computed today (FIFO is used); planned for a future version. ### Weighted-Average Cost (WAC) The cost basis method where every share carries the same per-unit cost, recomputed as a running total cost ÷ total quantity after each buy — also called moving-average cost (_gleitender Durchschnittspreis_ in Austria/Germany). Common in mutual fund and Canadian tax accounting, and mandatory in some jurisdictions. Not yet computed in Wealthfolio, which uses FIFO (planned for a future version); the “average cost” shown on a holding is a display figure over your open FIFO lots, not a moving average. ### Specific identification A cost-basis method where you pick which lots to close on each sale (typically for tax-loss harvesting). Not yet supported. ### Fractional share A position quantity that isn’t a whole number. Wealthfolio tracks lots to eight decimal places, so DRIP fractions, crypto satoshis, and broker fractional-share programs all work. * * * ## Activities & subtypes ### Activity Wealthfolio’s atomic event: every BUY, SELL, dividend, transfer, fee, etc. Activities are the source of truth — all portfolio state is derived from them. See [Activity Types](https://wealthfolio.app/docs/concepts/activity-types/). ### Subtype A semantic variation on an activity type (e.g. DRIP on DIVIDEND, Staking Reward on INTEREST, Option Expiry on ADJUSTMENT, Position Open/Close on BUY or SELL). Wealthfolio expands subtypes into canonical postings under the hood. ### DRIP — Dividend Reinvestment Plan A dividend automatically reinvested into more shares of the same security. In Wealthfolio: DIVIDEND activity with the DRIP subtype. ### Dividend in Kind A dividend paid as additional units of the same asset. DIVIDEND activity with the Dividend in Kind subtype. For a spin-off into a different ticker, use an External `TRANSFER_IN` for the received security. ### Staking reward Crypto income received as additional tokens for staking. INTEREST activity with the Staking Reward subtype. ### Position intent An Open or Close subtype on a BUY or SELL. Used for options (BTO, STO, BTC, STC) and explicit stock/ETF short workflows. ### Sell Short A SELL activity with Open Position intent. Opens or increases a signed short lot for a stock or ETF. Plain SELL activities do not open shorts. ### Buy to Cover A BUY activity with Close Position intent. Reduces or closes an existing short stock/ETF lot. ### External flow A `TRANSFER_IN` or `TRANSFER_OUT` with the External flag checked — represents an asset or cash moving in from / out to a world Wealthfolio doesn’t track (opening balances, gifts, write-offs, crypto sent to a wallet). ### Internal flow A `TRANSFER_IN` or `TRANSFER_OUT` paired with a matching activity on another Wealthfolio account. Cost basis travels between accounts; no new capital enters your portfolio. ### Net contribution The sum of capital actually deposited into your portfolio (deposits + external transfers in − withdrawals − external transfers out). Used to distinguish “did you make money?” from “did you put money in?” * * * ## Symbols & market data ### Ticker A short identifier for a security (e.g. `AAPL`, `RY`, `BTC`). Wealthfolio stores a canonical ticker per asset. ### MIC — Market Identifier Code An ISO 10383 four-letter exchange code (e.g. `XNAS` for NASDAQ, `XTSE` for Toronto, `XLON` for London). Wealthfolio uses MIC + ticker as the provider-agnostic identifier for an asset. ### ISIN — International Securities Identification Number A 12-character globally-unique identifier (e.g. `US0378331005` for Apple). Required by some providers (OpenFIGI) and a fallback when ticker disambiguation is hard. ### CUSIP A 9-character US/Canada securities identifier, often used for bonds. ### FIGI — Financial Instrument Global Identifier A 12-character Bloomberg-standard global identifier. Used by the OpenFIGI provider for bond and identifier lookup. ### Provider A source of market data — Yahoo Finance, Alpha Vantage, Finnhub, OpenFIGI, Börse Frankfurt, Metal Price API, US Treasury Calc, and user-defined custom providers. See [Market Data & FX](https://wealthfolio.app/docs/concepts/market-data-and-fx/). ### Preferred provider The provider Wealthfolio prefers when fetching quotes for a given asset. Set per asset under the Market Data tab. ### Per-provider override A symbol override stored on an asset for a specific provider — used when a provider expects a different symbol format than the canonical one (e.g. `SHOP-CA` instead of `SHOP`). ### Circuit breaker A reliability pattern in the market-data layer: after a provider fails N times in a row, it’s marked unhealthy and skipped until a backoff period expires. Stops runaway retries when an external API is down. * * * ## Currency & FX ### Base currency The currency every aggregated total in Wealthfolio is reported in. Set in Settings → Preferences. ### Account currency The currency a specific account is denominated in (e.g. a USD brokerage, a EUR bank account). Set at account creation and cannot be changed. ### Asset / holding currency The currency a specific security trades in (e.g. a Tokyo-listed stock has JPY asset currency). ### Activity currency The currency a specific transaction was settled in (e.g. you may buy a USD stock through your CAD account; the activity currency is USD). ### FX rate The exchange rate between two currencies on a given date. Wealthfolio uses the trade-date rate to convert each activity into base currency, then today’s rate for live displays. ### Minor currency unit A sub-unit of a major currency (GBp / GBX = British pence; ZAc = South African cents; ILA = Israeli agorot). Wealthfolio normalises these to the major currency automatically at the appropriate factor. * * * ## Dividends & income ### Dividend yield A security’s annual dividend per share divided by its current price, expressed as a percentage. Quick proxy for income return. ### Yield on cost The annual dividend per share divided by your _cost basis_ per share, not the current price. A long-time holder of a growing company will see yield on cost climb even if the market yield stays flat. ### Withholding tax Tax deducted at source on dividends or interest, typically by the broker for the issuing jurisdiction. Recorded in Wealthfolio as a TAX activity. ### Ex-dividend date The cutoff date for owning a security to receive an upcoming dividend. Buy on or after the ex-date and you miss the next payment. * * * ## Account types & contribution limits ### TFSA — Tax-Free Savings Account A Canadian registered account where contributions are after-tax but growth and withdrawals are tax-free. Has an annual contribution limit. ### RRSP — Registered Retirement Savings Plan A Canadian registered account where contributions are tax-deductible and growth is tax-deferred until withdrawal. Annual contribution limit based on earned income. ### FHSA — First Home Savings Account A Canadian registered account combining TFSA-like growth with RRSP-like deductibility, earmarked for a first home purchase. ### 401(k) / Roth 401(k) US employer-sponsored retirement accounts. Traditional 401(k) is pre-tax; Roth is after-tax with tax-free withdrawals. ### IRA / Roth IRA US individual retirement accounts. Traditional IRA is pre-tax; Roth is after-tax. ### Contribution limit The annual maximum you can deposit into a registered/retirement account. See [Contribution Limits](https://wealthfolio.app/docs/guide/contribution-limits/). ### Carry-forward room Unused contribution room from prior years that you can use in the current year (e.g. TFSA, RRSP). * * * ## Portfolio planning ### FIRE — Financial Independence, Retire Early A movement / planning style focused on saving aggressively to reach financial independence well before traditional retirement age. ### Safe withdrawal rate The percentage of your portfolio you can withdraw annually with high confidence of not running out of money. The classic figure is 4% but Wealthfolio’s retirement simulator lets you stress-test your own number. ### Glide path How your asset allocation shifts as you age — typically more equity early, more bonds later. ### Monte Carlo simulation A planning technique that runs your portfolio through thousands of randomised return sequences to estimate the _probability_ of meeting a goal, not just a single point estimate. * * * ## App concepts ### Account group A logical grouping of multiple accounts (e.g. “Joint”, “Spouse RRSP”) used to roll up performance and net worth on the dashboard. ### Holdings mode An account tracking style where positions are seeded with External `TRANSFER_IN` activities rather than recorded BUY-by-BUY. Faster to set up, less precise performance math. See [Tracking Modes](https://wealthfolio.app/docs/concepts/tracking-modes/). ### Transactions mode The full account tracking style — every BUY, SELL, DIVIDEND, INTEREST recorded. Precise performance math. ### Snapshot A pre-computed portfolio state at a specific date. Wealthfolio caches snapshots at strategic dates so the dashboard doesn’t replay the whole activity history on every load. Snapshots after a backdated edit are invalidated and rebuilt incrementally. ### Custom provider A user-defined market-data provider that fetches prices from any JSON API, HTML page, table, or CSV source. No coding required. See [Custom Providers](https://wealthfolio.app/docs/guide/custom-providers/). ### Connect Wealthfolio’s optional paid service. Adds automatic broker sync (via SnapTrade) and end-to-end encrypted multi-device sync. See [Connect](https://wealthfolio.app/connect/). * * * **Need a term that isn’t here?** Open an issue on [GitHub](https://github.com/wealthfolio/wealthfolio/issues) — the glossary grows from real questions. * * *