Why can a price-return chart disagree with a total-return chart?

Name the cash flows before comparing the percentages

When two charts disagree, first ask what each series includes. A higher ending price and a larger ending investment value are different measurements. Write the opening units, opening price, distributions received, reinvestment convention, closing units, closing price and remaining cash on one page. Add the dates and currency.

The SEC’s performance-claims bulletin identifies dividends, fees, taxes and calculation methodology as relevant interpretation questions. That does not prescribe one universal comparison. The useful task is to identify the convention, then apply the same convention to the alternatives being compared.

A hypothetical worksheet: 2% price return, 5% ending wealth

Suppose an invented asset starts at $100 and ends at $102. One unit is held throughout, and a $3 cash distribution is received and kept as cash. Stipulate no other flows, fees, taxes, interest or splits. The price return is ($102 − $100) ÷ $100 = 2%. Ending wealth is the $102 asset plus $3 cash, or $105; the holding-period gain relative to the opening $100 is 5%.

Both numbers follow from these invented inputs. The difference is not evidence that either chart is fraudulent or that the distribution is free profit. This example says nothing about how a real price changes around a distribution, and it predicts no actual return. Its purpose is to make a missing cash-flow assumption visible.

Reinvestment requires another dated price

Now change only the cash treatment: stipulate that the $3 is reinvested at an invented price of $99, with fractional units permitted and no charge. It purchases 3 ÷ 99 extra units. Ending wealth becomes (1 + 3 ÷ 99) × $102, approximately $105.0909. The corresponding holding-period gain is about 5.0909%.

This third number needs the $99 reinvestment assumption. A summary that says dividends included without identifying when and how they were reinvested is incomplete. Preserve fractional-unit and rounding rules. Do not add a cash distribution again if the chosen return series already incorporates it.

Turn the disagreement into a comparison card

For each chart, record its start and end observations, price adjustment basis, distributions, cash interest, reinvestment, fees, taxes and currency treatment. Mark an undocumented field unknown. If one side uses price only while the other reinvests distributions, label the comparison accordingly rather than presenting the difference as strategy skill.

Thesis Lab’s current demonstration history covers 20 retrospectively selected surviving equities plus SPY from 2022-01-03 through 2026-10-22. Its split-normalized closing prices exclude dividends. That dataset cannot, by itself, establish a dividend-reinvested total-return result. Additional assumptions or data must not be silently invented.

Method, sources, and limits

The three calculations are original hypothetical arithmetic, not an observed market experiment, product backtest or recommendation. Source and release checks were completed on 26 October 2026. Holding periods, distribution conventions and implementation details can change a comparison; none of these calculations establishes future performance.