Why "RUN"ning the same input = get different outputs

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goixiz
Posts: 13
Joined: Sun Oct 25, 2020 12:42 pm

Why "RUN"ning the same input = get different outputs

Post by goixiz »

I can press the "RUN" button with the same input, but the results changes the Median Endign portfolio value ?

jimr
Posts: 661
Joined: Thu Feb 28, 2008 6:48 pm

Re: Why "RUN"ning the same input = get different outputs

Post by jimr »

How much variation are you seeing between runs?

A variation in the ending portfolio value of a few percent between runs is not too surprising.

The short answer to your question about why this happens is that the planner runs 10,000 iterations through your retirement plan and each of those 10,000 iterations uses a unique randomly selected sequence of portfolio returns. This means that each of the 10,000 iterations will likely have entirely different results (because the portfolio returns vary so much).

The median ending portfolio value that's reported is determined by sorting all the values from the 10,000 iterations and choosing the middle value (eg the 5,0000th one in the sorted list of values).

Usually, with 10,000 iterations, the median value doesn't vary too much from run to run. This is the reason 10,000 iterations through the plan are done, rather than just 10 or 100 iterations. Even with this though, it's still normal for there to be some variation in results from run to run.

goixiz
Posts: 13
Joined: Sun Oct 25, 2020 12:42 pm

Re: Why "RUN"ning the same input = get different outputs

Post by goixiz »

thanks for clarification

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