WATS
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| March 4, 2003 - New, free on-line utility available. This utility calculates the maximum sustainable withdrawal rate from a portfolio based on your input for investment horizon, account ending value goal and historical success rate. Outputs include the optimized asset allocation, the sustainable withdrawal rate and the initial account value needed. The utility was built using output from the Black Box program, the optimizer in the Advisor Edition of WATS. Back in 1996 J&J Financial Company began creating WATS as a way to test historical performance of investment strategies. Today, WATS is unmatched in its ability to validate and discover viable investment strategies. It has been used by mutual fund companies, investment advisors, retirement planners, bank trust departments, researchers, writers and financial planners to analyze and strengthen investment strategies. In some respects, WATS is simply a very sophisticated, highly advanced retirement calculator. Unlike most calculators, though, WATS does not rely upon straight-line projections for rates of return and inflation rates. Instead, WATS uses actual market performance to see how you would have fared, had you lived through any particular time in history. By testing every available historical period, WATS provides a single, easy-to-understand measure of the effectiveness of your strategy, the historical success rate. WATS uses historical success rates as popularized by the Trinity Study to validate investment strategies. Beyond that, WATS finds optimal asset allocations using a computational technique called simulated annealing. This new method of portfolio optimization has the advantage over the traditional mean-variance (efficient frontier) method in that there is no model to build. The bias of the model builder cannot affect the outcome of the test. The actual historical data itself is the model. Unlike most other, advanced retirement calculators, WATS does not use monte carlo simulation (MCS). Instead, WATS uses historical simulations. To learn more of the differences between these two approaches, see the brochure below entitled WATS versus Monte Carlo Simulation, or see our Research page for a paper by Dr. David Nawrocki discussing the shortcomings of MCS. Two recent additions to WATS, Portfolio Stressor and Black Box, are designed specifically for finding optimal asset allocations and spending policies. Click here for a complete feature list. Another indication of the value of WATS comes from the growing body of published research created using WATS. See our Research page for links.
BrochuresThe following brochures can be printed on letter-sized paper. WATS
versus Monte Carlo Simulation |
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Copyright © 2000, 2004 Zunna, Inc. Last updated on 02/12/2004 |
