BacktestFolio · Glossary
Backtest
In plain language
It is like testing a strategy back in time: take the assets you want to hold today and see how they would have returned over the last 20 or 30 years. Useful for understanding historical risk and returns, but past results do not guarantee future outcomes.
Technical definition
Simulation of a portfolio strategy's performance by applying chosen weights to actual historical asset prices. The result shows how that allocation would have performed in the past — it is not a forecast of the future.