In this show, Jason and Alex talk about stress testing portfolios and how to invest for the future. This is extremely important given all the uncertainty surrounding potential election results, and the future of our economy. The main goal is to stress test client financial plans and investment strategies to truly achieve financial peace of mind. This allows investors to make good financial decisions by cleansing their financial mindsets to focus on things they can control. Alex discusses that highly contentious elections, civil rights movements, and democracy aren’t new things, but the way that investors and leaders choose to act around those major events is an opportunity to build and improve on experiences from the past.Jason and Alex talk about what a financial plan really is. They define a financial plan as taking all financial information in one’s life and programming it into a very sophisticated software that models out ANY potential scenario. This would include all assets, all liabilities, income sources, taxes, inflation, expenses, all expectations about markets and performance of specific markets, rental real estate specifics, buy/sell business and real estate transactions, etc.

Jason explains that the software has the ability to analyze and show the output for ANY potential financial decision, and show the cause and effect relationship between crucial decisions surrounding saving more, spending less, investing more aggressively, retiring at different ages, and insurance coverage just to name a few. Jason compares this to several hundred engineers sitting in a room analyzing a client’s financial situation.Jason explains that it doesn’t matter if someone has hundreds of millions of dollars to invest or five hundred thousand of investable assets, a financial plan should be the cornerstone of any person’s investment strategy. He explains that Monte Carlo analysis is also known as probability analysis, and this involves taking into account hundreds of factors to show what is the probability of success within one’s financial life.Alex explains that one of the number one financial fears is running out of money. The main goal of Monte Carlo analysis is to show the probability of not running out of money, and then good financial decisions can be made based on the proposed outcome. Jason explains a financial plan is run through 1000 random variations and sequences of returns looking back over 40 years of outcomes.

If the success ratio is too high, then there are specifics ways for clients to maximize their financial life. Long term goals and objectives and a client’s target rate of return are based heavily on the probability of success.Jason and Alex talk about the Aladdin portfolio analysis tool that has the ability to stress test a client’s portfolio in a wide range of different ways to show what would have happened during historical periods and through potential major economic events/changes in the future.Jason offers to provide listeners with a complimentary second opinion, and the opportunity to have a draft of their financial plan built out. They invite listeners to send their questions to or call 877-707-8889.

In this show you will learn about:

  • The accurate definition of a comprehensive financial plan
  • Monte Carlo analysis and investment analysis tools used to stress test a financial plan and investment strategy
  • How to determine the appropriate investment strategy and target rate of return for a client
  • The Aladdin analysis tool and its capabilities to show shocks to an investment portfolio