We were recently discussing the cable television show “Mad Money” because it takes a lively and entertaining perspective on the typical format of a show that dispenses financial advice/information. However, as with all such hot news, by the time the information has been disseminated, it is already incorporated into stock pricing within our highly efficient markets, and thus no longer useful information on which to base decisions about trading. Instead, we would suggest that, rather than following recommendations that may or may not match an individual’s ability, need and willingness to take risk, prudent investors continue to adhere to their well-developed plan based on their long-term financial objectives.

What is Monte Carlo? It is a statistical method for analyzing random phenomena such as market returns.

How can it help you? This basic overview of Monte Carlo explains why this tool is so helpful in viewing an uncertain future.

Download “Understanding the Basics of Monte Carlo” (PDF)