Bruce Ferguson

I have to begin with thanks for the “splendid chap.”

Replies to issues you raise:

1. For your cautious client – The volatile journey is not known, but you can show your client probabilistic examples of what it might be using Graph 4. Each is an individual year-by-year simulation run through his cash flow plan with Port A or Port B. Or you can display year-by-year runs for each, A and B, for comparison. You can do as many as you like for each portfolio, in sets of ten runs.

2. You can analyze asset allocation models you select, as opposed to those identified by the software, by entering your allocations for Port A, or for both Port A and Port B. Unless your software is very old, you can also enter 11 allocation models in the ModPorts window and analyze those too.

3. Rather than say the software provides the safest for a given time constraint, I would prefer to say it identifies a “safest” (in % probability of meeting goals) and compares it with others; and it compares them for a given cash flow of plan & goals, which incorporates cash inflows and outflows through the years of the overall time horizon.

If any of this is unclear, or if there is more to discuss, please let me know.

Dick Purcell

Thanks for your interest in Portfolio Pathfinder.

Pathfinder has a built-in system through which you can replace any one or more of its 22 asset classes. This system does all calculations and inserts your asset classes with return-rate averages and standard deviations, and correlations with your others and with those you did not replace. All you need is, for each asset class you want to put in, at least the last ten years’ annual return rates.

The relevant windows for asset class replacement are shown at this website’s DemoWindows page — its top two illustrations. (You can enlarge either of those illustrations for legibility by clicking it.)

The top illustration shows Pathfinder’s AssetClasses window, with the asset classes provided in Pathfinder with their relevant data. They definitely have a USA slant. For each, the data are calculated from longest available history using indices you would expect, such as S&P500 for US LargeCaps and Russell2000 for US SmallCaps. The correlations are based on longest history available for all the asset classes.

Just above the AssetClasses window’s “stairs” there’s a Replace button. When you click that you get a second window, the Replace window, aligned with the AssetClasses window as shown in this website’s DemoWindows second illustration.

In the Replace window, in the row of each asset class you want to replace, enter your new asset class’s name and at least the last ten years’ return rates, as in the website illustration for rows 1 and 2. (You can Paste in the numbers as in Excel, using the “Paste returns” button in the Replace window’s top right.) Then when you click the Replace window’s Replace button, all calculations are done and your new asset classes with their data are put into the AssetClasses window, replacing the ones that were in the same rows. This includes your new asset classes’ correlations with each other and with the others you did not replace.

We offer full support by email and/or phone, including a full phone session right after you get Pathfinder, with us both looking at and manipulating Pathfinder. These sessions typically run up to an hour or more including a lot of back-and-forth discussion. Pathfinder is aimed not only toward revealing best result probabilities for an investor’s future, but also fullest investor understanding. Its graphs are highly interactive, and we want to make sure you can make full use of their powers right away.

If you have further questions, please let me know.

For UK customers, the purchase method we’ve found best is you send payment electronically and we send your Pathfinder CD by FedEx. If you want to get it, let me know and I’ll send details.

Dick Purcell
PlanScan, LLC

Portfolio Pathfinder was recommended in ‘Smarter Investing’ by Tim Hale. I’ve looked at your (excellent) YouTube videos and understand the product as presented. What I don’t know are the data sources (for expected returns and correlations), and how that would relate to me as a non-US investor (with mainly UK listed ETFs and a few international stocks). Can you advise please?