RT Journal Article
SR Electronic
T1 The Strengths and Weaknesses of Various Financial Simulation Methods
JF The Journal of Wealth Management
FD Institutional Investor Journals
SP 33
OP 42
DO 10.3905/jwm.2004.391056
VO 6
IS 4
A1 Joseph H. Davis
A1 Nelson W. Wicas
A1 Francis M. Kinniry
YR 2004
UL https://pm-research.com/content/6/4/33.abstract
AB Financial planners employ one of two statistical procedures to generate estimates of future asset values: historical simulation and Monte Carlo simulation. Through an application of statistical analysis, financial simulation, and intuition, this paper appraises the relative merits and limitations of these disparate approaches. In short, Monte Carlo simulators possess distinct advantages, but overall they do not offer a superior alternative to appropriately conducted historical simulations.