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Article: Monte Carlo method more helpful with a computer calculation
- Article from:
- Post-Tribune (IN)
- Article date:
- June 8, 2008
- Author:
CopyrightCopyright, 2008, Post-Tribune. All rights reserved. REPRODUCTION PROHIBITED. (Hide copyright information)
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THIS ELECTRONIC VERSION MAY DIFFER SLIGHTLY FROM PRINTED VERSION
There is a planning tool that is becoming much more widely adopted in the financial planning field that I think most people with a focused, or even rough, retirement goal in mind will find helpful.
The tool is a type of Monte Carlo simulation called sequence of returns and it helps financial planners, or individuals, bring a component of historical reality to their planning models that hasn't been present in previous version of financial planning software tools.
Monte Carlo methods are a class of exploratory calculations, or models, that rely on repeated random sampling to compute their results. Because of their reliance on ...