Long-range confidence interval projections and probability
DOI:
https://doi.org/10.61190/fsr.v14i1.4814Keywords:
Forecasting, Confidence intervals, BootstrappingAbstract
Accurately estimating long-range confidence intervals and probability estimates associated with an investment portfolio is critical to the financial planning process. To address this, computationally intensive data limiting Monte Carlo techniques have become popular. The results of this study suggest that simple theoritical probablistic return projections based only on an expected return and standard deviation estimate are just as accurate. This, using a simple spreadsheet, financial planners and investors can accurately assess a wide range of possible outcomes for a myriad of asset allocations, investment amounts and time horizons without needing to resort to more sophisticated methods.
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