|
AllocationADVISOR uses Monte Carlo simulation to simulate thousands of possible portfolio values in order to explore possible future outcomes. The Portfolio Value graph (below) shows how the portfolio value grows for a sample of simulation trials. The red lines on the graph reach zero. The table summarizes the range of possible portfolio values for different time periods and shows the user-entered cash flows.
Figure 1: Monte Carlo
Simulation - Portfolio Value
AllocationADVISOR's Simulation Probabilities graph and table (below) show the probability of reaching user-defined wealth targets.
Figure 2: Monte Carlo
Simulation - Simulation Probabilities
The Simulation Probabilities graph and table (below) can also display the probability of reaching a portfolio value of zero.
The Simulation Case table (below) shows the inputs that AllocationADVISOR used to create the simulation. All of these parameters are user-defined and can be customized to simulate different scenarios.
|
