How to Beat Inflation: Monitoring Real Return with HICP Benchmarks in DonkyCapital

Yes. The Performance Timeline widget supports weekly, monthly, and yearly views. You can use the HICP benchmark in any of these modes, though the annual view is the most meaningful for long-term real return analysis.

HICP data is published by Eurostat on a monthly basis and is updated in DonkyCapital as soon as it becomes available. The current month's data may not yet be available if it hasn't been released by Eurostat.

Currently the widget supports one benchmark at a time. To compare your portfolio against both inflation and a stock index, you can add two instances of the Performance Timeline widget to the dashboard, each with its own benchmark.

The chart overlays the two series visually — it doesn't automatically calculate the difference. The bar shows nominal return, the line shows inflation. To calculate the exact real return, use the formula: [(1 + nominal return) / (1 + HICP inflation)] − 1.

The S&P 500 tracks the 500 largest US companies and is the dominant benchmark for investors with primarily American equity exposure. The MSCI World includes approximately 1,500 companies from 23 developed countries, with the US representing around 65–70% of the index. For a European investor with a global portfolio, the MSCI World is generally more representative. By adding both to separate DonkyCapital widgets, you can directly compare how much of your performance is driven by the US market versus global developed markets.

Yes — and in fact it should be the minimum benchmark every investor tracks. Beating inflation is the necessary condition for preserving purchasing power over the long term. However, it is not sufficient to evaluate portfolio quality: a portfolio returning 3% with 2% inflation beats inflation, but would significantly underperform any diversified equity index. HICP comparison should be your first check, not your only one.

It depends on your investment horizon. For meaningful evaluation, the annual view is most informative: it filters out short-term noise and enables a clean comparison against the annual HICP inflation figure. The monthly view is useful for identifying periods of strong divergence — such as the inflation spikes of 2022. The weekly view is too granular for drawing strategic conclusions about real return.

It depends on which benchmark. If you underperform HICP inflation for several consecutive years, you are losing purchasing power — a signal that your strategy needs review. If you underperform the S&P 500 but still beat inflation, you may be building real wealth, just less efficiently than a passive ETF. Systematic underperformance versus a market benchmark is a strong argument for reviewing your active allocation and considering broader diversified passive instruments.

Yes. Your benchmark should reflect your current strategy, not a past one. If you have shifted from a predominantly US equity portfolio to a global approach, replacing the S&P 500 with the MSCI World as your market benchmark makes sense. Similarly, if capital preservation has become your primary goal rather than aggressive growth, giving more weight to the HICP benchmark is the right choice. In DonkyCapital, you can change the benchmark at any time directly from the widget configuration panel.

Currently DonkyCapital offers a curated selection of predefined benchmarks: major stock market indices (S&P 500, DAX, EURO STOXX 50, and others) and country-level HICP macro benchmarks. Uploading a fully custom index is not yet supported. However, you can use the Rebalance function in Capital Management to compare your portfolio against a model portfolio of your own design — which is functionally equivalent to a custom benchmark for allocation purposes.