While there are no guarantees when it comes to investing, Tapparo Capital Management analyzes portfolio risk by using a sophisticated statistical technique called Monte Carlo simulation. This computer-aided modeling system:
Projects annual returns on your portfolio over the course of your expected lifetime.
Randomly varies the returns you’ll get every year to reflect market realities.
Simulates the performance you would see from your portfolio if you lived hundreds of lifetimes to try to model uncertainty of the financial markets.
Gives you a clear idea about how confident you can be that your portfolio will allow you to achieve your financial goals.
Monte Carlo quantifies the risk that you will not be able to afford all that you want in the future. No one can predict the future with certainty and statistics do not replace good judgment, but this technique assists in better understanding life’s financial realities, and we make it part of our practice.
On Monday (February 5, 2018), the S&P 500 fell 4.1%. This was the steepest decline since August 2011. Should we be worried? Right now, I don't think so. Let's take a rational look at what's going on with this market.
While Monday's d...