Thanks a lot for this video! Currently doing a course Mathematical Finance and this video really helped with the practical side of implementing Monte Carlo Simulation!
Hi, really enjoyed your video and have used it to model different portfolio ideas! I was wondering if you had an idea on how to incorporate monthly drip-feeding into the model? For example estimating S&P 500 returns in dollar terms when investing $500 per month.
Thank you for posting an excellent video. I learned so much!!! I'm trying to come up with a return of my portfolio that has several mutual funds. At least one of them doesn't have all the data (e.g., it starts on 2020-01-02 whereas the others start on 2007-01-03). As a result, I can't combine the returns. Do you've a suggestion for how to solve this issue?
Thanks for watching! Yes, there are a few options... you could 'backfill' the data from 2007 - 2020 for that mutual fund by sampling the 2020-2024 data over and over. This gives you a sense of what the returns 'would have been' But I don't think I would recommend that, especially because 2020/2021 had pretty extreme performance, and so the backfill might be skewed. Instead, I would just recommend assigning a weight of 0 to that mutual fund from 2007-2020, and then increasing the weight once the mutual fund 'comes online'. That's the most realistic way: you had zero weight in the fund beforehand! Does that make sense?
@@chessability. Thanks for getting back to me. Yes, your suggestion makes a lot of sense. I'm somewhat familiar with R but don't know to elegantly add 0 weigh for 2007-2020. I appreciate your help.
@@chessability. Thanks for your help. I've learned so much in the last 24 hours by watching your video and getting your responses. I really appreciate it.
Hello! I think the proper terminology is that this is just a "Monte Carlo simulation." In this specific case we're looking at a Monte Carlo simulation to test for portfolio downside. Does that help?
Thanks a lot for this video! Currently doing a course Mathematical Finance and this video really helped with the practical side of implementing Monte Carlo Simulation!
Awesome, happy to hear! Good luck with the course!
Thank you so much for this great video ! It was clear and very informative.
Thanks for watching!
Hi, really enjoyed your video and have used it to model different portfolio ideas!
I was wondering if you had an idea on how to incorporate monthly drip-feeding into the model? For example estimating S&P 500 returns in dollar terms when investing $500 per month.
Thank you for posting an excellent video. I learned so much!!!
I'm trying to come up with a return of my portfolio that has several mutual funds. At least one of them doesn't have all the data (e.g., it starts on 2020-01-02 whereas the others start on 2007-01-03). As a result, I can't combine the returns. Do you've a suggestion for how to solve this issue?
Thanks for watching!
Yes, there are a few options... you could 'backfill' the data from 2007 - 2020 for that mutual fund by sampling the 2020-2024 data over and over. This gives you a sense of what the returns 'would have been'
But I don't think I would recommend that, especially because 2020/2021 had pretty extreme performance, and so the backfill might be skewed. Instead, I would just recommend assigning a weight of 0 to that mutual fund from 2007-2020, and then increasing the weight once the mutual fund 'comes online'. That's the most realistic way: you had zero weight in the fund beforehand! Does that make sense?
@@chessability. Thanks for getting back to me. Yes, your suggestion makes a lot of sense. I'm somewhat familiar with R but don't know to elegantly add 0 weigh for 2007-2020. I appreciate your help.
@@bahramshahrooz4213 For sure! If your weight vector is called w, and you want to set the first 100 elements to 0, just try w[1:100]
@@chessability. Thanks for your help. I've learned so much in the last 24 hours by watching your video and getting your responses. I really appreciate it.
@@bahramshahrooz4213 Of course! Let me know if I can help with anything else!
Hiya, what Monte Carlo Simulation method would you say you used here?
Hello! I think the proper terminology is that this is just a "Monte Carlo simulation." In this specific case we're looking at a Monte Carlo simulation to test for portfolio downside. Does that help?