I was playing around with Monte Carlo Simulation to get a sense of an asset allocation I want. I noticed that a 100% US Stock had oddly lower returns than a very high US Stock to ex-US stock. The difference in returns seems to be an issue with the site's simulation rather than a real result. Below are the results from a 100/0 US/ex-US allocation vs a 99.9/0.1 US/ex-US allocation.
| Allocation US/ex-US | 10th Percentile | 50th Percentile | 90th Percentile |
|---|---|---|---|
| 100%/0% | $17,486 | $65,254 | $215,328 |
| 99.9%/0.1% | $27,638 | $92,788 | $281,695 |
| 99.8%/0.2% | $27,821 | $92,840 | $281,912 |
99.8/0.2 was included to show that a change in 0.1% should be insignificant. If I can catch this obvious error then I wonder how many issues there are that I cannot determine without running the raw data myself. I am not sure if this simulation can be trusted. Is there something I am missing? Is there another site that seems to work well as a simulator for different allocations?
Settings to reproduce my values are $10000 initial and no contributions/withdraws. All other settings were unchanged.
Submitted May 29, 2024 at 01:27AM by Brenden2016 https://ift.tt/zT6kc81
