When I look at the adjusted close prices of SP500, for example, I notice that the numbers are always significantly below the actual closing.
In the explanation of what adjusted prices are, one gets the impression that the Open prices for the stock on the next day that a certain event happens (such as splits or dividend pays) should be equal, or very similar to, the adjusted close price.
However, this is never the case. Why is there a systematic discrepancy?
Date,Open,High,Low,Close,Volume,Adj Close 2009-09-30,106.36,106.46,104.62,105.59,254383000,97.27 2009-09-29,106.51,107.02,105.78,106.00,133733900,97.65 2009-09-28,104.85,106.55,104.83,106.32,118285800,97.94 2009-09-25,104.78,105.36,104.09,104.45,204059000,96.22 2009-09-24,106.41,106.64,104.55,105.01,228636800,96.73
I'm trying to evaluate a certain automated strategy but this difference is giving me a hard time to know what my position is after a trade is done. I understand that I buy and sell at the raw prices, but it's not clear to me how to properly evaluate the value of the portfolio at a given point in time.