Is Monte Carlo planning compatible with stock / fund selection?
This is one of the most interesting and least discussed topics in the Monte Carlo (hereafter called MC) portfolio planning literature. While most discussions look at broad classes of assets–such as investing in a stock index fund and a diversified bond portfolio–MC methods are extensively used in professional risk management for a portfolio of individual instruments. You may want to look at whether it makes sense to add individual stocks to your portfolio—and which ones. Our Portfolio Planner and Retirement Planner accomplish this task easily. For the the more sophisticated investor, this is an interesting and productive pursuit–looking at how your individual stock selections work together in a portfolio. This is a more advanced topic than basic planning. We have written a number of articles on this issue that are available on our website (www.quantext.com). QPP and QRP analyze any combination of stocks, funds, and ETF’s and projects total portfolio risk and return. This is very u
