DonkyCapital
Guide · Benchmarks & Inflation

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

In our portfolio tracking mistakes guide, we saw how inflation can turn a positive nominal return into a real loss. But knowing the problem isn't enough: you need a tool that shows you, year by year, whether your portfolio is truly beating inflation.

DonkyCapital integrates Eurostat HICP (Harmonised Index of Consumer Prices) data directly into the Performance Timeline widget, letting you overlay European inflation on your return chart. The result: an immediate view of real return, without manual calculations.

Why Compare Against Inflation, Not Just Markets

Most investors use stock indices as benchmarks — S&P 500, EURO STOXX 50, DAX. That makes sense: you want to know if you're beating the market. But there's a more fundamental question that's often ignored: is your portfolio creating real wealth, or are you just preserving nominal capital while its real value erodes?

A portfolio that gains +7% in a year with 9% inflation has lost purchasing power. Investing to preserve purchasing power is the minimum goal of any long-term strategy — and it's the first thing to monitor before even comparing yourself with the markets.

The return that truly matters

  • → 2022: portfolio +7%, HICP EU inflation +9.2% → real return −2.0%
  • → 2021: portfolio +12%, HICP EU inflation +2.6% → real return +9.2%
  • → 2023: portfolio +8%, HICP EU inflation +5.4% → real return +2.5%
  • → Formula: real return = [(1 + nominal) / (1 + inflation)] − 1

To learn more about the impact of inflation on returns and other common mistakes, read our guide to 5 portfolio tracking mistakes.

How to Configure the Benchmark in the Performance Timeline Widget

The benchmark is configured directly in the Performance Timeline widget. It takes three clicks:

  1. 1Open the Performance Timeline widget in your DonkyCapital dashboard
  2. 2Click the gear icon ⚙ in the top right of the widget to open settings
  3. 3In the "Benchmark" section, select "HICP European Union" from the dropdown (or your country's HICP variant)
  4. 4Click "Save Changes" — the chart will update immediately
DonkyCapital — Performance Timeline widget configuration with HICP European Union benchmark
🔍 Click per ingrandire

The Benchmark section in the Widget Configuration panel. The "Macro" tag distinguishes inflation benchmarks from stock market indices.

💡 The benchmark applies only to the widget you configure it in. You can have multiple Performance Timeline widgets on the same dashboard, each with different benchmarks — one with HICP for real return view, one with S&P 500 for market comparison.

How to Read the Return vs Inflation Chart

Once configured, the widget overlays the dashed inflation line on the return bars. Before reading the chart, choose the time granularity that best fits your goal:

Three available views

WEEKLY Useful for monitoring short-term volatility. Weekly inflation variations are minimal — the most useful reading is spotting return spikes in the macro context.
MONTHLY Ideal for tracking monthly performance during periods of high inflation. Lets you identify the months where the portfolio suffered the largest real losses.
YEARLY The most meaningful view for long-term planning. Compares annual return vs annual inflation — the clearest metric to understand if you're building real wealth.
DonkyCapital — Performance Timeline (yearly view) with HICP EU benchmark overlaid on the portfolio return
🔍 Click per ingrandire

Green bar above the dashed line

Positive real return — the portfolio beat inflation that year

Green bar below the dashed line

Negative real return — inflation eroded the nominal gain

Bar below zero

Both nominal and real loss — the double negative effect of 2022

Analysis of the real example shown

  • →2021: return ~+17% vs HICP ~+2.6% → excellent real return (+14%)
  • →2022: return ~−16% vs HICP ~+9.2% → devastating year in real terms (real loss ~−23%)
  • →2023: return ~+7% vs HICP ~+5.4% → thin real return, barely positive
  • →2024: return ~+10% vs HICP ~+2.7% → solid real return (+7%)
  • →2025: return ~+8% vs HICP ~+2% → good real return

⚠ 2022 already looks bad at −16% nominal, but overlaying HICP reveals that the loss of purchasing power was approximately −23% real. Without this comparison, the damage is systematically underestimated.

All Available Benchmarks in DonkyCapital

DonkyCapital offers two categories of benchmarks, selectable from the widget configuration panel menu:

DonkyCapital — full list of available benchmarks: stock market indices and HICP macro benchmarks
🔍 Click per ingrandire

The menu shows "Index" benchmarks (stock market indices) and "Macro" benchmarks (HICP inflation indicators by country).

IndexIndex Benchmarks — market comparison

  • ·S&P 500 — the primary American stock index (500 large US companies)
  • ·EURO STOXX 50 — the 50 largest companies in the Eurozone
  • ·DAX — German stock index (40 blue chips)
  • ·FTSE 100 — British index of top 100 capitalizations
  • ·FTSE MIB — Italian stock index (40 main Italian Exchange stocks)
  • ·CAC 40 — French stock index
  • ·IBEX 35 — Spanish stock index
  • ·Dow Jones Industrial — 30 historic large American companies
  • ·Russell 2000 — American small caps (2000 small US companies)

MacroMacro Benchmarks — HICP inflation comparison

  • ✓HICP European Union — average inflation across the entire Eurozone (recommended as baseline)
  • ✓HICP Italy — Italian-specific inflation (ideal for those spending primarily in Italy)
  • ✓HICP Germany — German inflation
  • ✓HICP France — French inflation
  • ✓HICP Spain — Spanish inflation

Use the HICP of your country of residence if your daily expenses are primarily in that currency and price context. HICP EU is more suitable for those with an international spending profile or who want a neutral European benchmark.

Which Benchmark to Choose Based on Your Profile

Global ETF investor (MSCI World, All World)

→ HICP EU as inflation baseline

Add S&P 500 on a second widget to see comparison with the US market

Predominantly European portfolio

→ HICP EU or your country's HICP

Then EURO STOXX 50 for comparison with the European market

Main goal: preserve real capital

→ HICP EU or national HICP

Inflation is the minimum benchmark to beat before any other comparison

Want to know if you're a good stock picker?

→ S&P 500 or the reference index of your main market

If you beat the reference market, you're creating real alpha

Frequently Asked Questions

Can I use the benchmark on periods other than yearly?

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.

Is HICP data updated in real time?

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.

Can I overlay both a stock index and HICP on the same chart?

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.

Why is my manually calculated real return different from what I read in the chart?

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.

Start Monitoring Your Real Return

Configure the HICP benchmark in your Performance Timeline widget and instantly see whether your portfolio is truly beating inflation — year by year, without calculations.

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