60/40 Portfolio Return Model
00
To estimate the 10-year expected return and growth trajectory of a diversified 60/40 stock/bond portfolio accounting for volatility.
NOTEAbout This Model
## To estimate the 10-year expected return and growth trajectory of a diversified 60/40 stock/bond portfolio accounting for volatility. This model estimates **Portfolio Value** based on uncertain inputs: Expected Annual Return Stocks, Expected Annual Return Bonds. Fixed values: Initial Investment. Run the simulation to see the distribution of possible outcomes.
VARIABLEExpected Annual Return Stocks
beta(2, 18)
Historical long-term equity returns typically range from 5-15% including dividends.
expected_annual_return_stocks
VARIABLEExpected Annual Return Bonds
beta(2, 19.2)
Bond returns are generally lower than stocks, matching historical 10Y treasury and corporate yields.
expected_annual_return_bonds
CONSTANTInitial Investment
100000
Starting portfolio value
initial_investment
TIME SERIESPortfolio Value
prev * (1 + ((0.6 * expected_annual_return_stocks) + (0.4 * expected_annual_return_bonds)))
12 months
from initial_investment
Trajectory of the portfolio balance over 10 years based on annual re-sampled returns.
portfolio_value
OUTPUTPortfolio Value
portfolio_value
Projected portfolio balance over time with a 60% stocks / 40% bonds allocation. The fan shows how return volatility compounds—useful for retirement planning and risk tolerance assessment.
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.