Module 3
Monte Carlo Lab
One simulated fund tells you almost nothing. Run the same fund strategy thousands of times and the real distribution of outcomes emerges.
Set your parameters and run the simulation to see the distribution of possible fund outcomes.
Why This Matters
A single fund outcome is one draw from a wide distribution. Monte Carlo simulation reveals the full range of what 'the same strategy' can actually produce — including the unlucky and the extremely lucky scenarios.
Common Misconception
A skilled investor can predict which fund outcome they'll get. In truth, even identical strategies produce wildly different results purely from variance in a power-law world.
Key Takeaway
Judge a strategy by its distribution, not by any single simulated (or real) outcome.