Portfolio Mix: Defines the percentage of each investment type in your portfolio for Monte Carlo (Historical Input Data) and all Historical analyses. Annual return data is taken from a variety of sources:
- Stocks data - based on S&P 500 Index and MSCI US Broad Market Index,
- Bonds data - based on S&P High-Grade Corporate Index and Lehman Aggregate Bond Index,
- Cash data - based on Citigroup 3-Month Treasury Bill Index.
Monte Carlo Simulation — Historical Input Data:
For each year in your Trajectory, a set of growth/inflation rates is randomly chosen based either on the defined years (Historical Input Data) or define parameters (Parameterized Input Data). The process is repeated multiple times based on the "Total Runs" value.
For each year in your Trajectory, historical return rates are used beginning with 1928, by default. For example, if your Trajectory spans a 50-year period, returns from 1928 to 1978 are used. The process is repeated for each year there is data, meaning we also simulate 1929-1979, 1930-1980, 1931-1981, etc...
The following results are then displayed:
- All runs of your Trajectory using the historical values.
- A thick yellow line that represents the particular historical run that begins with the designated Start Year.