Works both ways
Hypothetical portfolio over 20 years
2005-2015 I have $1 and earn 0.5% from brokerage on cash
2016-2026 I deposit $5 million in 2016 and earn 20% cagr for 10 yrs
TWRR shows 8% return and portfolio underperforming S&P
DWRR shows $5 million grows to $32 million
Technically portfolio underperformed Index. But growing $5 million to $32 makes performance 7x which is roughly S&P over same period.