Investments 2.0

Course Description and Objective: 

This is an advanced investing course focusing more on the technical side of investing and real returns. We will concentrate on the factors that contribute to overall returns as well as the impact of fees and internal fund costs. Although we will not discuss recommendations, we will look at “past performance” movements and how they affect the investor’s belief and choices going forward. As a hot topic of discussion, we will dive into intrinsic metrics and debate the age-old question of value versus growth, as well as the self-limiting return strategy of certain options. We will also define and discuss the importance of:

  • Alpha, Beta, Std deviation
  • Impact of fees and costs of trading
  • Sequence of returns with and with withdrawals
  • Modern portfolio theory
  • Various grading systems like Morningstar
  • Efficient frontier and Monte Carlo simulations

Monte Carlo Analysis is a complex statistical method that charts the probability of certain financial outcomes at certain times in the future by generating many possible economic scenarios that could affect the performance of your investments. The Monte Carlo simulation uses at most 1000 scenarios to determine the probability of outcomes resulting from the asset allocation choices and underlying assumptions regarding rates of return and volatility of certain asset classes. Some scenarios assume favorable financial market returns, consistent with some of the best periods in investing history. Some scenarios assume unfavorable financial market returns, consistent with some of the worst periods in investing history. Most scenarios will fall somewhere in between. The outcomes presented using the Monte Carlo simulation represent only a few of the many possible outcomes. Since past performance and market conditions may not be repeated in the future, your investment goals may not be fulfilled by following advice that is based on the projections. 

Tools such as the Monte Carlo simulation will yield different results with each use and over time depending on the variables inputted and the assumptions underlying the calculation. If this Analysis makes use of a Monte Carlo simulation, the term "Monte Carlo" will be included in the title. Simulation assumptions include the assumed rates of return and standard deviations of the portfolio model associated with each asset. The assumed rates of return are based on the historical rates of returns and standard deviations, for certain periods of time, for the benchmark indexes comprising the asset classes in the model portfolio. Since the market data used to generate these rates of return change over time your results will vary with each use over time. 

IMPORTANT: The projects or other information generated by a Monte Carlo simulation regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. 

This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding any funds or stocks in particular, nor should it be construed as a recommendation to purchase or sell a security. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. 

Securities and Investment Advisory services offered through Securian Financial Services Inc. member FINRA/SIPC. Evershore Financial is independently owned and operated. 1750 N. Maitland Ave., Maitland, FL 32751 DOFU 3.2022 461562