April 2020 updates + investment strategy for this period

Hi friends,

Wow. Just wow, it was definitely a blood bath the previous week. I am currently writing on the 4th week of march. But in the 2nd and 3rd week of the month, I experienced quite a big loss in my investment. It was an exciting experience. I was elated when the flash drop occur and the circuit breaker happened in the US market.

So, here are my strategy for this period of extremely turbulence (This is not a recommendation. I am just talking about my plans for my personal investments):

1. Increase my DCA into Stashaway to $1000 a month. (I have about $12,000 in my warchest. As a  bear market would last for an average of 13 months, that is how I will allocate my finances)
2. I have allocated $5000 for "timing the market" (NOOOOO, WHY AM I DOING THIS). I am trying to time the Nikkoam REIT ETF as I believe that there are fundamentally strong companies in the etf and I really like the idea of having 4-5% of passive income from the etf. (If I invest in this period of low valuation, I am expecting a higher dividend yield.)
3. If needed, I will be pulling money from my emergency funds and take this opportunity of a lifetime.

Now, let talk about my portfolio:
1. Stashaway (Invested 2900, current value 2777 )
2. Stashaway Simple (Invested 6900, current value 6929.13)
3. Coasset (Invested 1000, expected return of 1090 in 2020)
4. Funding Society (Invested 2623, current value 2720)
5. Endowment (Invested 6000, expected return 6556.4 in 2022)
6. FSMone - Nikkoam STC Asia REIT ETF (Invested 1548, current value 1584)

That would bring my returns to 1.41%. Not including cpf, life insurance etc.

There is this financial saying that more millionaires are made in a crash than a bull market (I will be putting that to the test). I cannot be a millionaire from the amount that I have, but I believe that I can set myself in a good financial position from this turbulent period.

Till next time,
Stay vested, stay frugal my friends.

Dionysius

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Active management allows for better performance in market downturns?

Hi friends,

One of the counter-arguments brought-forth by active management believers would be that they can utilise some other instruments (bonds, derivatives, or even cash) in a market downturn to achieve better performance in a market downturn (like the one that we are having now). Thus, I will be examining if this saying holds up when we look like historical data:

Links:
1. https://www.onedayinjuly.com/active-vs-passive-in-down-markets
2. https://advisors.vanguard.com/iwe/pdf/FASAPMSM.pdf
3. https://advisors.vanguard.com/iwe/pdf/FASAPCM.pdf
4. https://www.morningstar.com/articles/852864/will-active-stock-funds-save-your-bacon-in-a-downturn
5. https://us.spindices.com/documents/spiva/persistence-scorecard-december-2019.pdf?force_download=true

From the POV of active investment:
Passive investments would rely on the market index (index funds/ etfs) for their investments. As the market goes into a downturn, active investment would shine as they would often own stocks that are outside of the index. This would mean that they have the potential of performing better than the market index when it goes down. A skilled manager would only pick the good stocks in the stock market and hence, it should perform a lot better than just buying all the stocks in the market using index funds.



Looking at the figure above, we can see there in a bear market, active managers do perform better than compared to a bull market. Hence, from a short-term perspective, active managements can be considered as a way of investment (Provided that we can choose the ones capable of choosing the right stocks)


However, when we attempt to look at things from a long-term perspective (i think of around 10 years?). The graph above actually shows that for the top 20% actively-managed funds in one crisis, only 23% would remain in the top 20% for the next crisis.

Effectively, only 4.6% of actively-managed funds would remain in the top 20% in their performance for a period of 2 crisis. The issue of how we want to select this 4.6% is beyond me, as I believe that it is more likely due to luck that they actually remained in the top 20%. Evidently from the 77% that actually slide below the quintile.

The same also applies if we look at the US small-cap funds and emerging market fund. Please look at link number 1 for that.

Also, looking at the SPIVA scorecard, which includes 12 equity buckets spread across Large-Cap, Mid-Cap, Small-Cap, and Multi-Cap. Each of those four broad categories is further divided into Core, Growth and Value sub-categories. The 13th category is Real Estate funds. The SPIVA score card has data started in 2001. 

Looking at the 2001 dot com bubble burst and the 2008 financial crisis, only 4 out of 13 of the categories has more than half of the active funds beating their respective index in 2001. In 2008, only 2 our of 13 of the categories has more than half of the active funds beating their respective indexes.  

Hence, even in a market down turn, we are unable to see substantial evidence that active management would perform better than their respective indexes. This is especially evident in the previous paragraph, where only 4/13 of the categories of active funds out perform their indexes in 2001, only 2/13 of the categories of index funds out perform their indexes in 2008. 

In conclusion: when we look at the short-term perspective, there are indeed a substantial proportion of active funds that will outperform the market (50%, so if you would want to choose a fund, you can choose to flip a coin), However, in a long-term perspective, there is no substantial evidence that active management would consistently perform better than passive-investments. Between one crisis to another, there is no consistency in which fund will always do well in the crisis. 

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Research on the validity of the 4% Rule

Hi friends,

These are the links to the papers and articles that I have referenced in this post:
1. https://www.researchgate.net/publication/228707593_Sustainable_withdrawal_rates_from_your_retirement_portfolio
2. https://www.researchgate.net/publication/50211311_Sustainable_withdrawal_rates_of_retirees_Is_the_recent_economic_crisis_a_cause_for_concern
3. https://www.forbes.com/sites/wadepfau/2018/01/16/the-trinity-study-and-portfolio-success-rates-updated-to-2018/#73f347216860

For those of us that are familiar with the (F)inancial (I)ndependence (R)etire (E)arly (FIRE) movement, you would have heard of the 4% rule. To give you some background, it meant that if you withdraw less than 4% of your portfolio every year, you may withdraw it for the rest of your life. This rule has been used as an important benchmark for those of us in the FIRE movement to determine the asset required in our portfolio.

This is when we should be critical. We should look at how is this rule being derived and the condition(s) that this rule is applicable to our financial situations.

Success/Failure: If the value of the portfolio is positive (>0), it is considered a success
Condition: Stock returns are from the S&P 500, bond returns are from the Salomon Brothers Long-term High-grade Corporate bond index and S&P high-grade corporate composite yield.
Overlapping method: As the data is taken from 1926-1997, there are 53 overlapping periods for 20 years payout, 48 overlapping periods for 25 years payout and 43 overlapping periods for 30 years payout.
The success rate is calculated by (No. of overlapping periods considered successful )/ (Total no. of overlapping periods):

With that, let's jump right in to examine if the 4% rule holds up under scrutiny (P.S.  I will only examine the inflation adjusted monthly withdrawal and I have also learnt my lessons and decided to screenshot these data.)



The percentage in the first row meant that on an annual basis, x% of the portfolio would be withdrawn. The data below means that for y% success rate between 1926/1946 to 1997. For x and y, the higher the better. A higher y would mean that there is a higher chance that our portfolio has a higher chance of having positive sums of money after a set number of years. A higher x would mean that we can withdraw a higher portion of our portfolio (More money for us when we retire)

Discussion of results:
Here we can see some counter-intuitive results. First of all, as we become older, we are often advised to shift a higher portion of our portfolios into fixed-income assets (bonds). BUT as we can see here, a portfolio that is bond heavy would not do as well as its counterpart as the payout period increase. Surprisingly, a higher portion of success can be seen in portfolios that are more focused in stocks.

The idea of just withdrawing 4% also holds up well, more than 70% success rate for the 100%, 75%, 50% and 25% stock portfolio. But when we look at the 100% bonds portfolio, the saying does not hold up for the period of 1926-1997

The idea of just withdrawing 4% does not hold up as well for the period of 1946-1997. The 70% success rate can only be seen in the 100% and 75% stock portfolio.

Hence, if we were to stick to the 4% rule without thinking of our portfolio allocations, we would be really wrong. Asset allocation does matter and the payout period would affect the success rate that our portfolio can sustain our yearly withdrawal rate.

PS: if you wish to check more recent data, do look at the forbes article. They have updated the table with more recent years and included government bonds into their calculation.

Limitations of data:
1. The results are from historical data, hence, it might not applicable to our portfolio when we retire.
2. The bond portion only takes corporate bonds into calculations and not government bonds,
3. There isn't data available for 35/40 years, which is our idea of retirement (assuming we retire at 40, and death at 80).
4. We do not know how much money we are left with. Hence, for those of us that want to leave money for our family, we would have to find another paper for it.

Conclusion:
Reading the paper has challenged my idea that a 4% withdraw guarantees my payout for the rest of my life, regardless of my portfolio. Furthermore, it surprised me that having more bonds in my portfolio would hinder my retirement rather than enhance it.

A possible follow-up to this might include using monte carlo simulations to have a stochastic approach to the study instead of a deterministic model.

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Conclusion of the study on funds and their indexes for 15 years (IV)

Hi friends,

Thank you for reading so far into my 4 part series. The objective of this part is to give you the key takeaways from the paper. This is especially important for those of you that cannot look at the data presented in the previous posts and just want the main point. Here I go:

1. Majority of funds would not perform as well as the market index as the time horizon increases.
2. Bigger fund sizes would perform better than smaller fund sizes. (But still less worse than their indexes)
3. Growth stocks generally perform better than value stocks.
4. A higher proportion of international funds perform better than their respective indexes, especially prevalent in small cap markets. This would mean that if you’re looking to invest actively, you would do better if you aim at the international small-cap market (22% chance of out-performing the market in a 15 years time horizon)

With that, I conclude this min-series. Next I will be writing about the performance of actively-managed funds in a bear market (As there has been counterarguments that active-management would fare better compared to their indexes in the bear market.)

I will also be talking about some basis of investing; what are bonds, stocks, ETFs, funds etc. So that we can be on the same page. Also, I will talk about the ideals that drives my financial journey.

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Comparison of funds and their indexes in international/global market across different caps for 15 years (III)

Hi friends,

I would like to thank you for still reading through this dry and technical series. I hope that you have learnt a lot from my second post. This is the third post and we shall look at the performance of the International and Global market. Do note that in the paper, global funds/indexes would include US stocks and international funds/indexes would not include US stocks. The paper can also be found at https://us.spindices.com/documents/spiva/spiva-us-year-end-2017.pdf - you should always check the sources of everything you read on the internet.

Without further ado, let me jump straight into the content:

Table of International, Global, Emerging Market funds and their respective index

Fund Category	Comparison Index	Percent of funds outperformed by index over 15-Years (%)
Global Funds	S&P Global 1200	82.47
International Funds	S&P International 700	91.63
International Small-Cap Funds	S&P Developed Ex-U.S Small Cap	78.13
Emerging Market Funds	S&P/IFCI Composite	94.83

Comparing this table compared to the U.S stock funds/index performance, we can see a slightly higher proportion of active-managed funds does better compared to the index. But majority of funds are still outperformed by their indexes. Which is important to note: How do you know if a fund would consistently outperform the index? Moving onto the Asset-weighted and Equal-weighted category, here we hope to see if the saying that "bigger funds would perform better" holds up in the international, global, emerging markets.

Average International equity funds 15-Years performance Equal-Weighted and Asset-Weighted

Fund Category	15-Year (Equal-Weighted) (%)	15-Year (Asset-Weighted) (%)
Global Funds	8.24	9.35
S&P Global 1200	9.52	9.52
International funds	7.19	8.38
S&P International 700	9.21	9.21
Emerging Markets Funds	10.8	11.89
S&P/IFCI Composite	13.41	13.41

I guess that the assumption does hold up. The bigger fund size would perform better compared to smaller fund size. But funds generally do not out perform their respective indexes

Next, we will be looking at the variance of the international, global and emerging market funds return

Spread of International, global and Emerging Market funds and index 15 year performance

Fund Category	25th Percentile (%)	75th Percentile (%)	Index Performance (%)	Difference (%)
Global Funds	8.27	10.22	9.52	1.95
International Funds	6.79	8.92	9.21	2.13
Emerging Market Funds	10.19	12.49	13.41	2.30

From the table above, we can see that the emerging market funds have the largest variance. This can be an indication that the emerging market is not as efficient. This shows in the bigger disparity of the 25th to 75th percentile. Furthermore, we can also conclude that more than 75% of funds would underperform their index in a 15 years time horizon for international and emerging market segments. 

This would prove that it would be difficult in trying to determine if a fund would outperform the market. You would have a better return if you just stick to the index.

 With that, I conclude my 3 part series. I will be writing another post as a summary to the points that I have listed out in the past 3 posts. I will also be writing another multi-part series based on another set of papers. With that, I hope that you have enjoyed it.

Till then,
Stay vested, stay frugal my friends.

Dionysius

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Comparison of funds and their indexes in the US market across different caps for 15 years (II)

Hi friends,

This is the second part of my four-part series on presenting to you the results of active-managed funds and passive funds. I will also be telling you what these data would mean in your personal finance.

However, there is still a need to explain some of the terms in the paper such that you may fully understand the significance of the results. So these are the things that you need to take note of:

1. Funds refer to the actively-managed funds and index refers to the market index that the funds are grouped against.
2. Funds assigned to the groups are judged based on the composition of their funds, having more than 75% weighting of large-cap stocks over a 3 year period would mean that the fund will be compared against the large-cap market index. The funds that have less than 75% weighting would be classified as multi-asset.
3. In each capitalization range, there would be growth, value and core. These are ways by which the weighting of the stocks are decided for the funds or the market. A growth fund/index would allocate a higher weighting to stocks of the capitalization range that are deemed to have higher growth potential (like ... uber? I'm not sure about that)
4. The 25th and 75th percentile returns of the different funds in their respective capitalization range would be used as gauge of variance for their return.
5. Fund performances are also categorized into asset-weighted, equal-weighted. As an example, asset-weighted calculated returns are calculated using the returns of the different funds of the capitalization range while taking into consideration the size of their respective managed asset. (Equal-weighted returns are calculated by taking the average return of the different funds of the capitalization range)
6. Global funds refers to funds that invest in stocks all around the world. International funds refers to funds that invest in stocks all over the world except US stocks
7. Returns of the funds are net of fees, excluding loads (Important)
8. The data are taken from SPIVA U.S. Scorecard 2017

Now that we are on the same picture, I shall now present to you the facts. Do take note that I will only look at the 15 years returns for funds and index. This is as I believe in the value of long-term investment.

Table of Large-cap, mid-cap, small-cap, multi-cap funds and their respective index

Fund Category	Comparison Index	Percent of funds outperformed by index over 15-Years (%)
Large-cap growth funds	S&P 500 growth	93.94
Large-cap core funds	S&P 500	94.67
Large-cap core funds	S&P 500 value	85.71
Mid-cap growth funds	S&P MidCap 400 growth	95.32
Mid-cap core funds	S&P MidCap 400	96.51
Mid-cap value funds	S&P MidCap 400 value	89.89
Multi-Cap growth funds	S&P Composite 1500 growth	86.21
Multi-Cap Core funds	S&P Composite 1500	90.82
Multi-Cap value funds	S&P Composite 1500 value	86.96

From this table, it can be observed that for a time horizon of 15 years, sticking to the index would be the wise choice. This is as majority of funds are unable to beat the market. The study has also included 1 year, 3 years, 5 years and 10 years data too. However, due to the limitations of my HTML skills, I didn't include it in. Do check out the information yourself. But from the paper, we can see that over a longer period of time, lesser portion of funds would outperform the market. (Using Large-Cap funds, 1 year was 63.06%, 5 years was 84.23%, 10 years was 89.51%) This would mean that over a longer period, funds has a lesser tendency of outperforming the market. Do note that I am not saying that all actively-managed funds will underperform the market. What I am saying is that if you are not sure on the approach of selecting a competent fund, you will perform better by sticking to the market index.

Moving onto the next topic, where we will look at performance of funds against the index (Equal-weighted and asset-weighted). However, we will only look for the large-cap funds performance (Because I need to enter all these data into blogspot, it is really hard). There are arguments that the largest funds should return a larger return due to their scale and there must be a reason why so much money is managed by them right? Hence, we should expect that asset-weighted performance should fair a bit better than equal-weighted (look to the top where I defined how the asset-weight performance is derived.)

Average US funds and index 15-Years performance Equal-Weighted and Asset-Weighted

Fund Category	15-Year (Equal-Weighted) (%)	15-Year (Asset-Weighted) (%)
Large-cap growth funds	8.99	9.55
S&P 500 Growth	10.30	10.30
Large-cap core funds	8.09	8.45
S&P 500	9.92	9.92
Large-cap value funds	8.19	8.80
S&P 500 value	9.38	9.38

From this table, comparing between the equal-weighted return and the asset-weighted returns, it can be observed that asset-weighted outperformed equal weighted return. So maybe there is some truth in saying a bigger fund might perform better compared to smaller funds. However, even asset-weighted still underperformed compared to the market. So, from this, we can see that there is a possible correlation between fund sizes and their performance compared to the market. Also, growth stocks have been favored by the market as compared to value stocks. (I have no idea what are the implications, I am presenting the facts.)

Next, we will be looking at the variance by calculating between the 25th and 75th percentile of the large-cap, mid-cap and small-cap funds. The variance should allow us to understand the spread of the funds in that capitalization range.

Spread of US funds and index 15 year performance

Fund Category	25th Percentile (%)	75th Percentile (%)	Index Performance (%)	Difference (%)
Large-cap growth funds	8.82	10.29	10.30	1.47
Large-cap core funds	8.20	9.63	9.92	1.43
Large-cap value funds	8.10	9.60	9.38	1.50
Mid-cap growth funds	9.49	11.39	11.97	1.90
Mid-cap core funds	9.38	10.81	12.00	1.43
Mid-cap value funds	9.15	11.34	11.90	2.19
Small-cap growth funds	10.22	11.61	12.64	1.39
Small-cap core funds	10.00	11.45	12.27	1.45
Small-cap value funds	9.94	11.59	10.17	1.65

From the table above, it can be observed that value funds have the biggest variance when compared to core and growth funds. This is applicable to all capitalization range. Also, at least 75% of funds would underperform the market (Except for large-cap and small-cap value funds).

So, we have looked at the long term performance of funds and their index, possibility of a correlation between size of funds and their performance and the variance of performance of funds in the US market in this post. I hope that it was informative to you as it was tough trying to sort through and make sense of all these data. I realised that this post is limited as I only looked at the US market (Efficient) and hence, there is a need to look at whether these scenarios are applicable to less-efficient market. I will be doing a similar thing to the global, international market (part 3) and emerging markets (part 4).

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Reading a paper comparing the performances of actively managed funds and index funds (Part I)

Hi friends,

I was encouraged to see so many of us are interested in the Monte Carlo simulations of the different portfolios using market indexes. I have also received requests from readers to talk about other financial topics (Don’t worry, I am working on those at the moment. There is just too much to write about and I want to make sure that the stuff I write are as factually correct as possible). For those that are eager to learn about your personal finance, I would recommend you guys to visit Seedly.sg – a comprehensive website that breaks down personal finance topics into easily understandable chunks for you.

I have learnt my basics from there and built up my knowledge from personal research. It is important to tell you guys that I do not have any affiliations or receive benefits with them. I just find that the materials are unbiased and objective. Also, I will definitely make it clear if some of the posts that I write in the future are sponsored (I’m not sure when will that happen though.) as I want you to make your own judgment on my content.

For this week’s topic; I will be talking about active investing vs passive investing. More specifically, managed-mutual funds/ unit trusts vs index funds/ etfs. These are the definitions for the both of them from Investopedia.com:

Managed-Mutual Funds:

A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets. Managed-Mutual funds are operated by professional money managers, who allocate the fund's assets and attempt to produce capital gains or income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus.

ETFs:

An exchange-traded fund (ETF) is a type of security that involves a collection of securities—such as stocks—that often tracks an underlying index, although they can invest in any number of industry sectors or use various strategies. ETFs are in many ways similar to managed-mutual funds; however, they are listed on exchanges and ETF shares trade throughout the day just like ordinary stock.

Here, some of you might assume that the two funds are the same; investing in stocks, bonds etc from the pool of money that they receive. However, the key difference is that the objective of the mutual fund is to beat the index, while the objective of the ETF is to track the index (The index is a way to gauge the market as a whole. Example the STI, S&P 500, Hang Seng etc.).

In my previous post, I have discussed the results of simulations using the etfs as a part or our whole portfolio. Notice that I have continued to invest the same amount of money during my simulation? This is an example of passive investment, where the investor does not spend a lot of time or energy to monitor the market or try to find the “best” stock to invest. We can see that majority of the time, the investor would earn a decent return on his/her money.

Hence, some of you might start to wonder: “If not doing anything other than buying and holding can earn me a decent return on my money. Why don’t I learn how to invest, put some effort into selecting the best stocks and try to beat the market?” This brings us to managed-mutual funds, where the managed-mutual funds managers would try to beat the market by selecting stocks using fundamental/ technical analysis. Generally, the people working for the funds are compensated extremely well for their expertise and their effort in trying to deliver stellar returns to the money that they receive from their investors (Similar to hedge funds, but hedge funds are a different topics, but they belong in the same category to active investment).

You would expect that the managers of the funds would beat the market right? As they have all the conditions to make them succeed. Years of experience, qualification, time spent to analyse the stock market, the latest technology to predict the movements of the charts etc.

Friends, no. From a research paper that I am currently reading, I have to inform you about the advantages and disadvantages of investing your money through managed-mutual funds. Especially from the point of view of past statistics, on how just sticking to the market works best for you in the long run. Now that I have explained the context of the research paper, in my next post, I will look into the data on the returns of managed-mutual funds (Actively-managed funds) vs their respective indexes.(S&P 500, S&P smallcap 600, S&P midcap 400 etc.)

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New Skills: Monte Carlo Simulation

Hi Friends,

I have recently learned about monte carlo simulations in excel. For those that are not so sure, monte carlo is essentially a simulation that you can run a lot of times to get the probability distributions of the process that you are about to take. Immediately, I thought of simulating the distributions of returns for different portfolios and for different numbers of years.

So here are the parameters of my simulations:

1. Current Investments of 2000
2. Time to retire is either 20/30 years
3. The annual sum of investment is S$40,000
4. S&P 500's average return and standard deviation were set to 11.2% and 18% respectively
5. All-Weather's average return and standard deviation were set to 7.14% and 7% respectively
5. Golden Butterfly's average return and standard deviation were set to 9.96%, 8% respectively
6. I ran 10,000 iterations for each scenario

I will be looking at the 25th, 50th and 75th percentile of the simulations for each of the following portfolios for different time horizons (S&P 500, All-Weather, Golden Butterfly). Also, for clarity, I will put the returns in percentage of the amount that I will be putting in for each of the time horizons. I will also be elaborating on each of the portfolios in my future posts. Do keep a lookout for that. Let us dive right in!

20 years horizon (800,000 invested)
S&P 500 
25th Percentile: $1,634,455.19 (208.52%)
50th Percentile: $2,282,044.73 (292.35%)
75th Percentile: $3,267,668.98 (411.24%)
All-Weather
25th Percentile: $1,437,916.75 (181.73%)

50th Percentile: $1,636,773.93 (206.42%)
75th Percentile: $1,859,624.41 (236.02)
Golden Butterfly
25th Percentile: $1,908,895.49 (241.29%)

50th Percentile: $2,220,314.74 (281.49%)
75th Percentile: $2,587,323.24 (329.80%)

30 years horizon (1,200,000 invested)
S&P 500
25th Percentile: $4,164,872.25 (361.12%)
50th Percentile: $6,521,762.47 (569.26%)
75th Percentile: $10,322,867.69 (876.24%)
All-Weather

25th Percentile: $3,180,541.45 (266.76%)
50th Percentile: $3,758,431.78 (314.80%)
75th Percentile: $4,483,307.45 (375.15%)
Golden Butterfly
25th Percentile: $5,070,241.72 (426.91%)

50th Percentile: $6,238,384.01 (522.47%)
75th Percentile: $7,709,867.92 (643.23%)

So, the story is simple right? We should obviously strive for the S&P500 for the 20 and 30 years time horizon and get the maximum benefit?

Hold on my friends. Let me tell you more about my analysis. 

Yes. S&P 500 has the largest return. But, we need to have a more comprehensive picture. When I have tried to calculate the probability of the portfolio losing the money, we might want to reconsider our options. (Essentially, I try to get the percentage of the 10,000 iterations that the portfolio LOSES MONEY.

20 years horizon (800,000 invested)
S&P 500 - 1.4%
All-Weather - 0.0075%
Golden Butterfly - NA (Excel thought that the number was too small)

30 years horizon (1,200,000 invested)
S&P 500 - 0.45%
All-Weather - NA (Excel thought that the number was too small)

Golden Butterfly - NA (Excel thought that the number was too small)

Essentially, through the data above, we can assume that for a 20 and 30 years horizon, we will not lose money from the All-Weather and Golden Butterfly portfolio. The probability of S&P 500 losing money would also decrease as we extend our time horizon (Duh). But for those of us that are extremely paranoid about losing money, maybe the other 2 portfolios may be more suitable for you.

With that, I hope that you can benefit from this. I hope to hear comments from you (Whether you guys like these kinds of content).

Till then,
Stay vested, stay frugal my friends.

Dionysius

Oh. For those interested to run the numbers, do let me know and I will send you the files. Or you can find the version I adapted from this link below;  https://alphabench.com/data/monte-carlo-simulation-tutorial.html

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