PROBABILITY | S&P 500 (SPY) | LONGEVITY |
---|---|---|
95% | 2.65% | 9.90% |
90% | 4.01% | 10.13% |
75% | 6.55% | 10.52% |
50% | 9.71% | 11.00% |
25% | 12.90% | 11.49% |
10% | 15.56% | 11.96% |
5% | 17.04% | 12.24% |
We may also calculate the confidence intervals or probability of exceeding a certain annualized return from the Monte Carlo model. With confidence intervals we can illustrate the confidence level an investor should have in obtaining an annualized return equal or greater to the calculated result of a stated interval. For example, using the table of calculated confidence intervals, an investor should expect a 75% probability that their investment in Longevity should meet or exceed 10.52% Similarly, an investor should expect that 75% of the time their ten year investment in the S&P 500 (via SPY) should meet or exceed 6.55%.