Monte Carlo Simulation

Because the future is both uncertain and unknowable, investment planning frequently involves efforts to simulate or “model” the future. Given certain investment decisions, how likely is it that a particular portfolio will succeed in reaching the goals set for it? For example, will a portfolio provide enough retirement income to last the owner’s lifetime? Will the expected investment results pay for a child’s education?

One way to analyze such questions is through use of a “Monte Carlo” simulation. Learn more below!