A few days ago, I mentioned
my online tool to inspect historic returns. The inspiration for the tool was a NY Times article -- however it's chart only showed stock returns while my tool allows you to choose any combination of stock, bond, money market and gold.
After coming back from a quick trip to Hong Kong (bought an Olympus Micro 4/3 DSLR), I
puzzled over the idea of integrating contributions and withdrawals into this chart. I first attempted to make it part of the same script but the input parameters and output data were too dis-similar. While it feels hackish (duplicate code in multiple files), copying the code into a totally new script allowed me to rework the internal logic without breaking the old one.
And here is the result:
http://personalbizfinance.com/pbf/data/portfolio_lifespan_start_end.plFor those interested in the source code:
http://personalbizfinance.com/pbf/data/portfolio_lifespan_start_end.zipWhat this dynamic chart effectively does reproduce my numbers from
Savings Rates Analysis in a historical context. Enter years of working, savings rate (by using the savings rate -> withdrawal table), portfolio asset allocation -- and the red/green will tell you how often your scenario played out poorly or favorably since 1928. If you see too much red, tweak the withdrawal amount down (in effect increasing the savings rate) to find the threshold that gives you a high probability of success.
(Filed in investing, tools)
Historic Portfolio Performance
Posted by Mossy
January 13, 2011 8:31 AM
After coming back from a quick trip to Hong Kong (bought an Olympus Micro 4/3 DSLR), I puzzled over the idea of integrating contributions and withdrawals into this chart. I first attempted to make it part of the same script but the input parameters and output data were too dis-similar. While it feels hackish (duplicate code in multiple files), copying the code into a totally new script allowed me to rework the internal logic without breaking the old one.
And here is the result:
http://personalbizfinance.com/pbf/data/portfolio_lifespan_start_end.pl
For those interested in the source code:
http://personalbizfinance.com/pbf/data/portfolio_lifespan_start_end.zip
What this dynamic chart effectively does reproduce my numbers from Savings Rates Analysis in a historical context. Enter years of working, savings rate (by using the savings rate -> withdrawal table), portfolio asset allocation -- and the red/green will tell you how often your scenario played out poorly or favorably since 1928. If you see too much red, tweak the withdrawal amount down (in effect increasing the savings rate) to find the threshold that gives you a high probability of success.
(Filed in investing, tools)
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