How do you read a Monte-Carlo simulation?
The median is the middle, not the goal. The lower edge is the part worth reading.
Monte-Carlo computes thousands of possible paths instead of a single one. Each year of each path gets a return drawn at random, and at the end the runs are sorted.
The median is the middle run: half end above it, half below. The 10th and the 90th percentile hold the middle 80 percent, and the probability of a loss counts the runs that end below what was paid in.
Fixed example: US$10,000 start, US$200 a month, 20 years, 7.0 % return.
Each year is a real annual return of the asset, drawn at random. S&P 500
- Worst case
- beats 14 % of runs
- Base case
- beats 35 % of runs
- Best case
- beats 65 % of runs
2,000 runs · bootstrapped from historical annual returns
How to read this in the simulator
With Pro the simulation runs on your own values and shows the fan, the three end values and the probability of a loss. The example here is fixed, so everybody reads the same picture.
What the figure does not say
Two thousand runs are a sample, not a proof. The draw only knows the years that are in the data, so rare events are rare in it too, and a path that never happened cannot appear.
Source: Annual values of the comparison series, as of 2025, retrieved 2026-10-05
Education, not advice. Disclaimer