Thursday, March 27, 2008

DIY Portfolio Analysis

Had a poke around the net and found this company, Structured Data LLC, based out of NY. They have a website riskamp.com 

They offer a free excel spreadsheet which allows you to model a portfolio. You do have to download their monte carlo excel add-in to use the spreadsheet.

The idea behind a Monte Carlo analysis is to model the results of a portfolio (can be actual or theoretical) by subjecting it to n random trials. You can then extrapolate the probability distribution functions, mean returns and figure out if you're committing too much or too little of your money into equity, bonds or money markets.

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