[long_equity_returns] [efficiency]

Although not always be the case, I had assumed that cumulative {DVR} would be a better estimator of {MVR_final} than cumulative {MVR} itself. Expressing each value as a ratio of {MVR_final}, the “efficiency” measure represents the ratio of the area between “one” and {DVR} to the area between “one” and {MVR}. Measures lower than 1 indicate that DVR is a better forward estimator than MVR itself. That needs to be tested.

The efficiency values are charted smaller and larger. The results are shown for every start year (X-axis), with a slider on the right for period length. Further down on the right, there is a country (UK or US) radio selector and then a portfolio (just equities or bonds) radio selector.

As examples, for UK equities, the average efficiency rating over all periods of 15 years was 0.75, which is reasonable, with generally poorer results for US equities.