Mar 27, 2007
The WSJ published a chart with the cheeky title of "Rich Get Richer" (reminiscent of the Economist). The underlying data concerned one-, three- and ten-year returns for the buyout fund category. For each return class, the overall mean and the means for the top and bottom 25% funds were depicted.
I won't go into the relevance of the title as I simply could not figure out how it connected with the data. The following shows the original chart side by side with the junkart version.
- Lines show the comparisons with a minimum of fuss compared with colored bars
- The overall mean return is placed in the middle of each line segment where it belongs, instead of being the first column
- The axis label, "annualized return", tells readers what is the performance measure
- Adding the word "funds" to "top quartile" and "bottom quartile" removes the possible confusion that those represent individual returns of the funds ranked at 25th and 75th percentiles, rather than the average returns of the bottom 25% and top 25% of funds
- The linear construct paints the correct picture that individual fund returns fall into a continuum
(Thanks to my students for some of these points.)
Reference: Wall Street Journal, Mar 3-4 2007.