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Have you seen the investment calculator on WolframAlpha? It's amazing. With a few simple inputs like portfolio starting value, age, and other values, you can get a huge amount of data crunching power at your finger tips.
The best part about it is that if runs endless Monte Carlo scenarios to give you the percentage chances that your portfolio will be above a threshold by a certain age. It is one of those tools that is fun to tinker around with in order to see the different input possibilities. You can model different types of portfolio risk, which is the key feature that sets it apart from all other retirement calculators. For instance, the Bloomberg calculator I featured earlier does not have a volatility feature, so it cannot model the different random walk possible outcomes on a portfolio. With the other calculators, there is no stress testing of portfolios, just singular assumptions.
Furthermore, another feature of this program is that it offers lifecycle investment portfolios that adjust the asset allocation over time. Most people have some sort of adjustment of allocations as they age, and that is where other calculators fall short, as only WolframAlpha can show the changes over time.
Does your portfolio guarantee that your retirement savings will hold up for the rest of your life? Check Wolfram Alpha to make sure.
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2 comments:
I am a huge Wolfram Alpha Fanboy I've written about it several times, jealous you got mentioned :-). It is one of the most useful engines out there.
Paul, you're right about WA, and the best part is that they're just getting started. One of the features they may include in the future is letting you create hypothetical portfolios with the different mutual fund and ETF data they have.
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