The Future Simulation tool in Stock Rover tests long-term portfolio growth under a wide variety of potential market scenarios. Powered by Monte Carlo simulations, this facility helps you visualize the range of possible outcomes for your investments over time.
A comprehensive set of configuration options allows you to tailor simulations to your specific requirements. For instance, you can define how bullish or bearish the market is likely to be and plug those probabilities directly into the model to see how your strategy holds up.
You can also designate a specific historical sample period from which to draw simulation data. This allows you to include or exclude specific market regimes, such as strong bull markets, severe bear markets, or extraordinary events like the 2000 tech bubble or the 2020 pandemic, to see how your portfolio would have fared under similar conditions.
Future Simulations are particularly effective for testing portfolio survival. In addition to market volatility, you can model the impact of inflation and the effect of regular contributions or withdrawals. For example, running these simulations can help determine the statistical odds of maintaining your lifestyle in retirement without exhausting your capital under various withdrawal rates.
The tool also offers advanced capabilities, such as demonstrating how regular rebalancing affects a portfolio’s volatility and return, and how various asset allocations—blending stocks, bonds, and cash—are likely to perform over the long term.
