60/40 Portfolio Return Model
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Project the 10-year growth of a 60/40 stock-bond portfolio accounting for market volatility.
NOTEAbout This Model
## Project the 10-year growth of a 60/40 stock-bond portfolio accounting for market volatility. This model explores how **Portfolio Trajectory** could play out, depending on Stock Annual Return, Bond Annual Return, Market Volatility, Annual Shock. Fixed values: Initial Portfolio Value. Hit **Run** to see the range of possibilities.
VARIABLEStock Annual Return
beta(2, 18)
Historical equity returns typically range between 5% and 15% depending on market conditions.
stock_annual_return
VARIABLEBond Annual Return
beta(2, 19.2)
Bond yields vary with interest rate environments, usually staying between 1% and 7%.
bond_annual_return
VARIABLEMarket Volatility
beta(3.5, 16.5)
Standard deviation of a balanced portfolio typically fluctuates between 10% and 25%.
market_volatility
VARIABLEAnnual Shock
triangular(-2, 0, 2)
Standardized normal shock applied each period to simulate volatility. The system resamples this each year.
annual_shock
CONSTANTInitial Portfolio Value
100000
Initial investment amount.
initial_portfolio_value
TIME SERIESPortfolio Trajectory
prev * (1 + ((0.60 * stock_annual_return) + (0.40 * bond_annual_return)) + (market_volatility * annual_shock))
10 months
from 100,000
Portfolio value over a 10-year horizon with annual volatility shocks.
portfolio_trajectory
OUTPUTPortfolio Trajectory
portfolio_trajectory
Track the portfolio trajectory output
What is Carlo?
Carlo is a visual tool for Monte Carlo simulation. Model uncertainty by dragging probability distributions, connecting them visually, and running thousands of scenarios instantly.