Random Walk Down S&P 500

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Random Walk Down SP 500 - of $100,000

The spreadsheet is Excel 2007, using historical S&P annual returns from 1926-2010.

If you have a $100,000 invested in the stock market, what amount can you expect in 10 years? Although the stock market might average a positive growth rate, we know from the past decade it can go down and sideways for a long time. I’m using a growth rate selected randomly from the actual annual rates of 1926 through 2010. I’m running 5 Monte Carlo simulations, which shows the variability of results. Although it’s not exact, you can think of the spread as being a result of starting investing at different points in the economic cycle.

Blog discussion

MonteSimulations.jpg