Telltale Chart

Telltale charts were first introduced by John C. Bogle during a keynote speech at the Morningstar Investment Forum in June 2002. They serve as a powerful tool for visualizing relative performance against a benchmark, offering a clearer way to detect changes in direction compared to standard growth charts.

Bogle used this chart to illustrate reversion to the mean (RTM) properties of investments. Each line in the chart is calculated by dividing the value of that investment by the value of the benchmark on that date. All lines start at 1.0 at the beginning of the chart time frame. Lines increase in value as the investment outperforms the benchmark and decrease in value as the investment underperforms the benchmark. A horizontal line means the investment is achieving the same returns as the benchmark. If a line drops below 1.0, that means the investment underperforms the benchmark relative to the start of the chart time frame. Conversely, a line above 1.0 is outperforming the benchmark relative to the start. A telltale chart makes it easier to identify the trend of an investment and whether it is outperforming or underperforming a particular benchmark. More information on the telltale chart is available on Bogleheads.

Past performance is no guarantee of future returns. Increased risk provides no guarantee of return.