Customizing your portfolio returns

Customizable returns allow you to enter custom risk and return values for any portfolio within the program. You will still be able to enter an asset allocation, but the program will use your customized risk and return numbers for analytical purposes.

To customize the portfolio return within a plan.  You can navigate to the Allocation tab and then click edit allocation menu.  Click on the use Custom Values check box, and then enter your custom average return and standard deviation for the allocation. In this example the program will use an average return of 10% and a standard deviation of 15% for the Monte Carlo analysis.

It is important to note that Monte Carlo analysis uses arithmetic average returns, rather than annualized, or geometric average, returns. Arithmetic returns will always be greater than or equal to annualized returns. For a little more in depth explanation of the difference between Average and Annualized returns, take a look at the article Difference Between Annualized and Average Returns.


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