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We start with $10,000 and earn $10,000 each year and want to earn atleast $1.5 million by the end of 40 years. If we can
We start with $10,000 and earn $10,000 each year and want to earn atleast $1.5 million by the end of 40 years. If we can invest in stocks, bonds, banks, inversely-correlated stocks, and the casino, based on the probability shown above, what should our investment strategy be using our total balance from $100,000 to $1.5 mil with 200,000 increments? Ex: if we have $300,000 how should we invest in comparison to $1.3 million? Thank you.
Stocks: Stellar: +8% (20%) Good: -4% (20%) Average: -4% (20%) Catastrophic: -40% (20%) +16% (40%) +4% (40%) +0% (40%) -8% (40%) +24% (20%) +8% (20%) +4% (20%) -4% (20%) +50% (20%) +12% (20%) +10% (20%) +0% (20%) Bonds (less payout, but less risky): Stellar: +4% (20%) +6% (40%) Good: -2% (20%) +3% (40%) Average: -2% (20%) +3% (40%) Catastrophic: -25% (20%) -10% (40%) +7% (20%) +10% (20%) +6% (20%) +9% (20%) +5% (20%) | +8% (20%) -5% (20%) +3% (20%) Bank Deposit (very stable): | All: +1% (99.999%) | -50% (0.001%) | Inversely-Correlated Stocks (can pay well when things go bad): Stellar: -15% (20%) +5% (40%) +10% (20%) +15% (20%) Good: -15% (20%) +5% (40%) +10% (20%) +15% (20%) Average: -5% (20%) -2% (40%) +0% (20% +2% (20%) Catastrophic: -6% (20%) +0% (40%) +6% (20%) +80% (20%) Lastly, we will give you the option to bet your savings at the Casino: | All: +90% (50%) -100% (50%) | Stocks: Stellar: +8% (20%) Good: -4% (20%) Average: -4% (20%) Catastrophic: -40% (20%) +16% (40%) +4% (40%) +0% (40%) -8% (40%) +24% (20%) +8% (20%) +4% (20%) -4% (20%) +50% (20%) +12% (20%) +10% (20%) +0% (20%) Bonds (less payout, but less risky): Stellar: +4% (20%) +6% (40%) Good: -2% (20%) +3% (40%) Average: -2% (20%) +3% (40%) Catastrophic: -25% (20%) -10% (40%) +7% (20%) +10% (20%) +6% (20%) +9% (20%) +5% (20%) | +8% (20%) -5% (20%) +3% (20%) Bank Deposit (very stable): | All: +1% (99.999%) | -50% (0.001%) | Inversely-Correlated Stocks (can pay well when things go bad): Stellar: -15% (20%) +5% (40%) +10% (20%) +15% (20%) Good: -15% (20%) +5% (40%) +10% (20%) +15% (20%) Average: -5% (20%) -2% (40%) +0% (20% +2% (20%) Catastrophic: -6% (20%) +0% (40%) +6% (20%) +80% (20%) Lastly, we will give you the option to bet your savings at the Casino: | All: +90% (50%) -100% (50%) |Step by Step Solution
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