quaazy1

Tracking 9 ETF Portfolios

"The famous professors at Yale have proven that asset allocation accounts for 90% of a portfolio’s return "...

I think that they suggested that it AA accounts for 90% of a potfolio's return VARIATION.

Using Default Risk to Limit Downside in Individual Stock Investing

Thanks,

Does the Monte Carlo engine take correlation into account (say between US vs International equity of about .6 to .8) when it's "Monte Carlo"ing the future, or is each asset's Monte Carlo random draw independent of the correlation matrix?? Put another way, if the random draw for the first year for US stocks is 6%, is the correlation between US and International stocks taken into account when drawing the International stock's return?

Using Default Risk to Limit Downside in Individual Stock Investing

I have been considering buying the QPP, but I have a question about the Monte Carlo tool... How is the serial correlation (the tendency to run positive for a while, then negative for a while, etc...) of an individual asset (SPY) dealt with in the Monte Carlo simulation?