How consistent does the data need to be?
It is important to remember that data will never be perfect, nor does it need to be. Portfolio decisions are rarely driven by small variations in the size of investment results, but rather by the general profile of those results. Therefore, consistency is much more important than precision. Economic modeling is essentially an approach for forecasting the future, so precision and accuracy in the traditional respect are not possible. However, if all opportunity projections are done using consistent methods and assumptions, portfolio analysis can provide insight into the interactions among them.
