The Current vs. Target Forecast Comparison screen shows the wealth percentiles forecast (without cash flows) and return percentiles forecast, based on a Monte Carlo simulation. This allows you to compare the potential future performance of the target allocation to that of the current allocation.
A percentile value represents the probability that the portfolio value (or return) will fall below that value. For example, if the 10th percentile wealth value is $500,000, there is only a 10% chance that the portfolio will have a value below $500,000. This corresponds to a 90% confidence level.
You can view either the return percentiles graph (trumpet graph) or the wealth percentiles graph (tulip graph). The default view is the wealth graph. To view the return graph, click the View drop-down and select Return Graph.
To remove the current or target allocation from either graph, uncheck the Display Current Allocation or Display Target Allocation check box.
To display wealth history on the wealth graph, click Setting. The Edit Forecast Settings dialog opens.
Check the View Wealth History box.
Click the Current Portfolio based on drop-down and select Holdings or Asset class Indexes.
Note: If the you select Holdings, the historical values displayed in the graph for the current allocation are calculated based on the returns of the actual investments in the client's accounts. If you select Asset Class Indexes, the historical values displayed in the graph for the current allocation are calculated from the returns of the asset class indexes. The target allocation can only be calculated from asset class indexes, because it has no holdings. The back-history values are determined by calculating the historical annual returns of the holdings or asset class indexes, and working backwards from the current portfolio balance.
In the Start Date box, use the up and down arrows to select the year for the historical period.
Click OK. Historical data appear as a dotted line or "stem" on the tulip graph.