📚 Financial Theory

This section documents the financial models, conventions, and definitions used throughout LibreFolio.

📖 Overview

Accurate financial calculations are critical for a portfolio tracker. LibreFolio implements standard financial conventions to ensure consistency with broker reports and real-world data. This section is organized into four thematic areas.

🗺️ Conceptual Map

🏦 Instruments

The building blocks of any portfolio:

• Asset Types — Stocks, ETFs, Bonds, Crypto, Real Estate, Indexes
• Transaction Types — Buy/Sell, Deposit/Withdrawal, Dividend, Fee, Interest, Transfer
• Asset Events — Dividend, Interest, Split, Price Adjustment, Maturity Settlement

📊 Technical Analysis

Data-driven chart overlays and mathematical reference curves:

• Indicators — EMA, MACD, RSI, Bollinger Bands
• Synthetic Benchmarks — Linear Growth, Compound Growth, Sine Wave

📐 Fundamentals

Core financial concepts:

• Day Count Conventions — ACT/365, ACT/360, 30/360, ACT/ACT
• Returns & Growth Rates — Simple vs Log returns, CAGR, annualization
• Taxation — Capital gains, tax deferral, Acc vs Dist

📈 Portfolio Theory

Modern Portfolio Theory and risk management:

• Diversification — Correlation, systematic vs idiosyncratic risk
• Asset Allocation — Strategic, tactical, glide paths, rebalancing
• Risk Metrics — Sharpe, Sortino, Max Drawdown, Volatility