The Future Simulation tool in Stock Rover tests long-term expected portfolio growth under a variety of possible scenarios. It is based on Monte Carlo simulation.
There are a number of settings in the Future Simulation tool that allow you to tailor the simulations to your specific requirements. For example, you can decide how bullish or bearish the market is likely to be in the future and plug those odds into the tool.
You can also select a sample period of time from which to draw historical simulation data. These periods can be designed to include or exclude strong bull markets or bear markets, or include or exclude extraordinary periods of the market such as the great bubble or the pandemic.
Future Simulations can be configured to test portfolio survival under a variety of different situations. In addition to modeling the future bullishness of the market, you can model in inflation, as well as the effect of regular portfolio contributions or withdrawals. For example, running a series of simulations can help show you the odds that you can retire without going bankrupt under various withdrawal scenarios.
Future Simulation has a number of other capabilities, such as the ability to show how rebalancing changes the volatility and return of a portfolio and how a blend of stocks, bonds, and cash is likely to perform.
