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!