You should start with the scenario that makes your current portfolio perform best.
Just tap on “Adjust to Your Portfolio” and dynamiX will provide you with the best scenario for your current portfolio:
After playing around with other scenarios, you can always return to this scenario by tapping on “Adjust to Your Portfolio”.
What do the Slider Positions Mean
A slider that is moved to the very left creates a worst case scenario.
On the very right, it creates a best case scenario.
You may find helpful comparisons for your slider position when tapping on “Open”:
What does the Interactive Graph mean and why is it always changing when i move a slider
The graph is only there for illustrational purposes.
It doesn’t have a specfic meaning but may help you get a quick impression over your current scenario.
That’s also the reason why it changes when you move a slider:
What is a Scenario
A scenario is defined by the positions of the three sliders:
It is composed of the risk and return characteristics of all holding types during the three market phases of your retirement plan – the next year, the period after the next year until retirement and the period from the beginning of your retirement til its end.
You only have to deal with the severity of each market phase by arranging the sliders accordingly. dynamiX will take care of the rest and always use the most up-to-date risk and return characteristics for your scenario.
Why should I activate the Sensitivities at the bottom
Scientific research showed that each retirement portfolio is highly sensitive towards a little set of scenarios.
It means that for a large majority of scenarios dynamiX either recommends switching off risk completely by holding cash only. Or it recommends to go full risk by investing everything in equities.
The orange sensitivities mark the scenarios for which your portfolio is highly sensitive. dynamiX will recommend the best mix of equities, bonds and cash for these scenarios. There, it will not recommend a cash- or equity-only strategy. If you move a scenario slider to a position that lies not within the orange area, you might have to ‘Optimize Payouts’ while stress testing:
At first glance, this seems to be very counterintuitive. But scientific research showed that the risk structure of a long-term investment strategy is highly fragile. Indeed, pursuing the right investment strategy for retirement is like balancing a broomstick on your hand.
The sensitivities help you identify the scenarios where the “retirement broomstick” won’t fall to the ground.
What is a Random Sample good for
Short answer: nothing.
It is there for illustrational purposes only and well, to play around with it a little.