Summer is the time of sun, fun, and relaxation that is unless you live in a hurricane zone. If you do, you likely know about the dreaded “cone of uncertainty used by weather forecasters to predict the likely path of a storm. The cone is often hundreds of miles wide, and although better than no prediction at all, it often leaves thousands of people wondering and worrying needlessly.
This year, the National Hurricane Center is shrinking the Cone of Uncertainty because they have developed new tools to help provide more accurate forecasts. Extended advisories and detailed graphics will allow the NHC to issue warnings further in advance and with more certainty.
At One Financial Services, we, too, now have the ability to make more accurate predictions. With hurricanes, the question is, “Where will it land”. In financial management, the question is, “How long will my money last”.
By using historical statistical modeling, the same principle used by the National Hurricane Center, we are able to determine if the current withdrawals from the investment portfolio we are sustainable for the duration of the client’s life expectancy
From a representative portfolio, using asset class and asset class history dating back to 1926, we are able to demonstrate through rolling-period-analysis if the withdrawals the client is anticipating will be sustainable by using all of the historical periods available to be tested.
This historical modeling approach deployed within Betavest software, allows us to determine your personal cone of uncertainty. We work with your controllable design elements such as asset allocation and the amount of monthly withdrawal to improve the probability that you will avoid the storm, or be able to ride it out.
At One Financial Services, we take our client’s futures seriously. Your goals are our goals. Let us help you relax and enjoy the summer…and many more summers to come.
Past performance does not guarantee future results. Your results may vary.
There is no assurance that the techniques and strategies discussed are suitable for all investors or will yield positive outcomes. The purchase of certain securities may be required to effect some of the strategies. Investing involves risks including possible loss of principal.