General information only. Not financial advice. Simulations use historical data and statistical models. Past performance and modelled scenarios do not predict future outcomes. Use these tools to build intuition, not to make investment decisions.

Three simulation tools

PortWorth offers three complementary ways to test your portfolio against uncertainty:

  • Monte Carlo: probabilistic projection of future wealth across thousands of randomised return paths
  • Historical Replay: apply actual past crisis returns to your current portfolio
  • Stress Test: one-tap market shocks showing the impact on your net wealth, asset class by asset class

All three tools use your actual portfolio: the real holdings, real values, and real debt from your PortWorth account. There is no need to re-enter numbers.

Monte Carlo and Historical Replay live in the Simulation Lab panel on the Performance tab and need the Advanced plan or above. The Stress Test is the What If Scenarios panel on the same tab.

Monte Carlo simulation

The Monte Carlo tool runs thousands of independent simulations of your portfolio's future, each using a randomly sampled annual return drawn from a normal distribution around your inputs.

  1. Go to Analysis → Performance, find the Simulation Lab panel and click Monte Carlo.
  2. Choose what is being projected: your investment accounts, those plus super, or your total net wealth. The starting balance fills in from your real position and can be overridden.
  3. Enter Expected Annual Return. Historical ASX 200 total return is ~9–10%. A globally diversified portfolio is similar. Many planners use 7–8% for conservative projections.
  4. Enter Annual Volatility. ASX 200 historical volatility is ~15%. If your portfolio includes bonds or cash, use a lower blended figure.
  5. Set the Time Horizon in years. Common choices: 10 years (medium-term), 20 years (pre-retirement), 30+ years (FIRE planning).
  6. Set the Number of Simulations. 1,000 gives a fast result; 10,000 gives a smoother distribution. Both are statistically robust.
  7. Optionally enter what you add each month. It is applied at the end of each simulated year.
  8. Click Run simulation. The fan chart appears within seconds.

Reading the fan chart

The fan chart shows the distribution of outcomes at each point in time:

  • Dark gold line: median outcome (50th percentile). Half of simulations ended above this, half below.
  • Wide gold band: 25th to 75th percentile. The "likely" range.
  • Light band: 5th to 95th percentile. The extreme range; 90% of simulations fell inside this.
What to look for The 5th percentile (bottom of the fan) is your worst-case scenario. If this number is still above zero at your target date, and above your FIRE number, you have a high probability of success.

Historical Replay

Historical Replay answers: "What would have happened to my specific portfolio during the GFC?" Not a generic index, but your actual holdings at their current values.

  1. Open the Simulation Lab and choose the Historical Replay tab.
  2. Select a period:
    • Global Financial Crisis, 2007–2012: a 38% down year, a 40% recovery year, then a second fall.
    • Dot-com Unwind, 2000–2003: the Australian market held up far better than the US tech indices.
    • 1987 Crash, 1987–1990: the crash year finished down only 8%, and the pain came in 1990.
    • 1970s Stagflation, 1973–1975: two consecutive years of more than 20% down.
    • COVID Shock, 2020–2022: a violent fall that recovered inside the same calendar year.
    • The Long Nineties, 1993–1999: a bull run, for contrast.
  3. Read the results: your net wealth at the end, the deepest point it reached, and a year-by-year table of what the market did and what it moved in your portfolio.
  4. Note what is held still. Only your growth assets move: shares, ETFs, crypto, and super at 75% of the share-market return, because a balanced super option is not fully invested in shares. Cash, property and debt are held flat, so what you see is the market’s contribution on its own.
Why this matters Most investors significantly underestimate how painful a 40% drawdown feels in dollar terms. Seeing "$420,000 portfolio → $250,000 at trough" is viscerally different from reading "-40%". This helps you calibrate your real risk tolerance before a crisis happens.

Stress Test

The Stress Test applies a set of simultaneous shocks across your asset classes and shows the immediate impact on your net wealth.

  1. Go to Analysis → Performance and find the What If Scenarios panel.
  2. Tap a scenario:
    • Market Downturn: shares −20%, property −5%
    • 2008-style Crash: shares −50%
    • COVID-style Crash: shares −35%, crypto −60%
    • Rate Rise +2%: rates up sharply, shares −10%
    • Rate Cut −1% and Bull Market: the same test in the other direction
  3. Read the results: your net wealth before and after, and a bar for each asset class showing what moved and by how much.
If you own property The scenarios shock property values, not your repayments. To test what a higher rate does to what you actually pay each month, use the loan tools on the Property tab instead, where the rate and term are your real ones.

Frequently asked questions

What return and volatility should I use for Monte Carlo?

For a diversified Australian equity portfolio: 8–9% expected return, 15% volatility. For a conservative balanced portfolio (60% equities, 40% bonds/cash): 6–7% return, 10% volatility. For a growth portfolio with crypto: higher volatility (20–25%). PortWorth's X-Ray tab shows your current allocation to help calibrate these inputs.

Can I add regular contributions to the Monte Carlo?

Yes. Enter your monthly savings amount in the Monte Carlo inputs. Each simulated path adds twelve months of it at the end of every simulated year, which is marginally more conservative than adding it month by month.

Do simulations use my actual portfolio composition?

Yes. All simulations start from your actual current net wealth figure. The Monte Carlo applies a single blended return to whichever total you choose — investments, investments plus super, or total net wealth — and does not model individual positions. Historical Replay and the Stress Test do separate your asset classes, using your actual holdings in each.