"Jimmy Smith" <nospam[at]pleaseno.more> wrote in message
news:FVvsc.954$ff2.473[at]bignews4.bellsouth.net...
- quote -

Yes. Are you experienced with stochastic analysis? Are you qualified to use
MCS appropriately?

MCS is a great tool to help show how volatility affects long term results,
but right now, there's a lot of abuse going on, both with armchair amateurs
and certain less-than-brilliant financial planners. That's why I'm wary of
the DIY investor using this stuff (and suspect of some planners who need
help). A slight change in variance and LTR can change drastically, with the
potential of giving one too much peace of mind because of overly optimistic
results, or worse, convince one to invest too conservatively to avoid all
risks, thereby requiring more capital/savings to achieve an objective.

I look at it this way. The average investor would have enjoyed better
returns in a CD during the last bull market. The average financial planner
isn't fluent in stochastic analysis (and I regularly consult with experts,
continually learning how much I don't know). Both can reap great benefits
from the proper and suitable use of MCS. Both can suffer greatly from its
abuse, too.

In a sense, MCS is like a good beer. =)

Use it wisely.

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

Is there any place on the web where I can do free Monte Carlo portfolio
simulations for myself?

Jimmy