Market simulations

Simulate inflation, interest rates and stock returns either by using a model developed by the Society of Actuaries (with some modifications for our purpose), or by using Canadian historical data. This is just for fun, we can't predict the future!

For the market model simulation, you can run simulations until you get one you like.

For the Canada historical simulation, we just use the historical rates, but we have data only back to 1980. You can set the date at which you want history to repeat itself. If more years are necessary it'll go backward and then cycle around.

Once you submit, you will be redirected to your rates table, and you will see the graphs for the simulation you selected below the table.

When you go to run the TIME MACHINE, you can select to use your saved simulation. In that case, ALL applicable rates and yields that are not set to zero in your rates and yields table will be substituted by the simulated rates. All cash will grow at the simulated cash yield (3-month T-bill). This includes all non-zero 'Cash' investments, so you may want to add at least one investment to your investment accounts if you want them to use the other rates. Fixed-income (without a maturity date) will grow at the simulated fixed-income yield (based on 10-year government bonds). Stocks or equity funds will grow at the capital gains plus dividend yield. We set the prime rate to vary with the 3-month T-bill rate +2.2%. Loan renewals will happen when necessary at the 3-month T-bill rate +4.2% (this is a gross approximation of historical rates). Inflation will vary every year at the rate simulated.

The simulated rates are only used starting next year.

Again, this just for fun, and still experimental. Use simulations in the TIME MACHINE only if you have a subscription, so as not to waste your free trial runs. Please note that you may run into an overflow error that could crash the TIME MACHINE. No worries, this has no impact on your data. If a simulated runs fails, you can simply try another simulation.