Your allocation
decides everything.
Choose your horizon and your split between stocks, bonds and cash. The simulation projects 1 500 possible trajectories: the median and pessimistic-to-optimistic scenarios.
Last updated: May 2026
Simulator
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Simulation of 1 500 market trajectories.
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How does the Monte Carlo simulation work?
Asset allocation is the most structurally important decision in a long-term portfolio. It determines your final outcome far more than the choice of individual securities or market timing. This simulator generates 1,500 random trajectories to quantify the impact of your split.
For each trajectory, the model draws each year a return from a normal distribution: the mean reflects the expected return of the allocation, the standard deviation reflects historical volatility. The parameters used are: equities (return 6.8%, volatility 16%), bonds (2.5%, volatility 5.5%), cash (0%). These values correspond to long-term historical averages of global markets.
Results are shown as percentiles. P5 means that 95% of the 1,500 trajectories did better. The P50 (median) represents the most likely outcome. P95 corresponds to the very favourable scenario. The dashed line represents total invested capital (initial capital + cumulative contributions), with zero return. The fan between P5 and P95 illustrates the uncertainty inherent in any investment.
Correlations between asset classes are simplified (independence assumed). Results are in nominal terms, without deducting fees or inflation. These simplifications make this tool an educational resource, not a personal financial planning tool.
Return assumptions based on MSCI World, Bloomberg Global Aggregate Bond Index and SARON rate historical data. No guarantee of future performance.
Frequently asked questions
How does a Monte Carlo simulation work?
The simulation generates 1,500 random trajectories, each with an annual return drawn from a normal distribution. The mean and standard deviation correspond to the return and volatility assumptions of each asset class. This gives the full range of possible outcomes, from very unfavourable to very favourable.
What is portfolio rebalancing?
Rebalancing consists of periodically bringing the portfolio back to its target allocation. After a strong equity rally, the equity share may exceed the target. Rebalancing means selling some equities to buy bonds and return to the initial target. It is a discipline that forces taking profits on what has risen most.
What average annual return have global equities delivered?
The MSCI World has delivered around 7 to 8% per year in CHF over the past 20 years, dividends reinvested. This figure hides high variability: some years exceed +25%, others fall to -40%. The long-term average is positive, but it guarantees nothing in the short term.
How is portfolio volatility calculated?
The volatility of a mixed portfolio is lower than the weighted average of individual volatilities, thanks to diversification effects. This simulator assumes independence between asset classes, which tends to slightly underestimate real volatility during crises when correlations increase.