Step 9: History
rolling periods, instead of traditional calendar year periods with a January beginning and a December ending. This method provides Simulated Passive Investor Experiences (SPIEs) which begin at the 1st of each month throughout the designated period. Figure 9-5 shows 12 consecutive 12-year rolling periods beginning on January 1, 1959. Each rolling period can be thought of as an outcome representing the experience of a unique investor who started and ended on the dates specified in the period. Hence, the name Simulated Passive Investor Experiences. The primary advantage of rolling periods is the large number of simulated investors who can be observed in a given time period. For example, in a 50-year period, there are 589 rolling 12-month periods as opposed to 50 consecutive, non-overlapping Figure 9-5
Published on Jun 1, 2015
This book reveals the potential land mines and pitfalls of active investing and educates readers on the benefits of passive investing with i...