More pre-defined asset choices?


In arranging my portfolios (taxable, retirement) in Planner Plus, the pre-defined asset choices available do not include a full set of bond (fund) choices, such as short-term and intermediate-term corporate bonds, mid-cap domestic stocks, etc. This forces me to substitute assets I hold with long-term corporates in the model, which I would expect to have wider variance of returns because of interest rate sensitivity during Monte Carlo modeling. While I could attempt to create these using bond or stock index histories as the case might be, would it not be more accurate and benefit many/most users to have these choices added by your team?


dan royer's picture

I can ask. Another approach, which is different I realize, is to use Economics mode and enter an assumed nominal rate of return for the regular assets and the two spouses' qualified assets. It's easier to control the assumed rate of return going forward this way since you are not reliant on history.

While not disagreeing with your request for more pre-defined classes, it's not hard to create your own. With custom assets they can be shared across portfolios and profiles.

I use asset class return data published by Their sources are described here.

By copying the entire table into Excel you can then copy a column and paste it into the custom asset composer. You also can use column-copy plugins in Google Chrome, and similar tools.

dan royer's picture

I love portfoliovisualizer. You can use the "backtest portfolio" tool and enter your actual tickers for your funds and see the nominal and real returns. I use a very conservative allocation of 80% FBIDX and 20% FUSEX (intermediate term bonds/s&p index) and see that since 1991 the compound annual return is 7.01% with a very low standard deviation of 4.15%. Nevertheless, I assume a 5% nominal return on my "husband's retirement accounts" that are allocated in this way. If I created my own asset classes in the Monte Carlo mode based on this return history, I would be assuming the 7%.

So I agree with Chris, but I use that information to then dial back my assumption to create a model based on a less rosy assumption than history would lead me to have. This is the same point that I was making in the last Question forum I responded to.

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