Portfolio Simulator

Diversification always benefits those with more capital. The larger your investment, the more different and robust systems you can add to your portfolio, increasing your chances of success compared to a smaller investor.


12/24/20234 min read

portolio simulator
portolio simulator

Investing in financial markets can yield significant returns but also entails considerable risks. To assist you in making informed decisions and preparing for various scenarios, LiderBot introduces its algorithmic portfolio simulator. In this article, we will delve into this powerful tool and how it can be your ally for financial success.

What is an Algorithmic Portfolio Simulator?

An algorithmic portfolio simulator is a tool designed to give investors a clear view of how their capital might evolve based on specific parameters, without guaranteeing future results. It's essential for those who wish to build and manage investment portfolios effectively.

Flexibility of Selection

A key advantage of LiderBot’s algorithmic portfolio simulator is its flexibility. Users are free to choose between 1 and 100 automated systems, as long as their available capital allows it. This means you can customize your investment portfolio according to your needs and preferences.

Initial Capital Allocation

Besides choosing the number of systems, you can also specify the initial allocation of your capital and maintain it constant over a two-year simulation period. This is crucial to assess how different allocations can affect your long-term results.

Rigorous Requirements for Automated Systems

To ensure the reliability of the results, LiderBot’s simulator only considers automated systems with at least 4 years of audited history, a maximum drawdown of €15,000, and, of course, those that have generated profits. Why such rigor? The past is an indicator of performance, and this tool is designed to face adverse conditions that might arise in systems with proven histories.

Consideration of Drawdown

A unique aspect of this tool is the consideration of the drawdown (maximum withdrawal) of the systems. If a system's drawdown exceeds €15,000, it should be considered as two systems in the simulations. This reflects the importance of evaluating how your portfolio can respond to adverse situations.

Realistic Simulations

LiderBot offers realistic simulations (based on our market perspective) over 24 months. During this period, you will get a clear vision of how your capital might evolve and prepare for market eventualities. In some cases, you might see that the profit generated exceeds our forecasts, which is possible. However, keep in mind that neither you nor we have a crystal ball, and you should always be prepared for potential challenges.

Preparation for Drawdowns

One of the main purposes of this simulator is to help you prepare to face drawdowns. These situations can have a significant impact on your capital, and knowing how you might cope is vital. Using this simulator, you can assess whether your portfolio is ready to withstand drawdowns and adjust accordingly. Always remember to have required capital locked in to operate the systems, and if at any point your portfolio value falls below this level, the portfolio has been poorly constructed or has failed. Please manage your capital responsibly.

Tool in Development

It's important to highlight that this simulator is an initial prototype. LiderBot envisions improving and developing an even more professional and rigorous system selection tool in the future, meaning you will always have access to the latest innovations in investment analysis.

In summary, LiderBot’s algorithmic portfolio simulator is an invaluable tool for any serious investor. It provides the flexibility to customize your portfolio, the capability to face adverse scenarios, and the preparation for drawdowns. If you aim to maximize your investments and make informed decisions, this tool is your ideal ally. Remember, knowledge and preparation are key in the world of investments, and LiderBot’s simulator offers both.

Simulate 100 Times: The Key to a Secure Financial Future

When selecting the initial capital and number of systems, just click on "Simulate 100 times." This will provide you with a realistic scenario of what you can expect in the next two years.

At this point, you will see the 100 simulations, but the most relevant is the scatter plot. It will tell you the capital you will have gained or lost after 2 years based on statistical probability. You can generate simulations over and over. The more difficult it is to find an expected profit, the less likely it will happen. This chart thus represents the scenario you should be prepared for and the possibilities that may arise after two years, but we still guarantee nothing. This is the stock market. If you are not prepared or comfortable with this scenario, we recommend not investing with systems. We prefer you leave satisfied and speak well of us rather than acquire a monthly license and use the systems if you are not completely sure.

However, if you decide to use the systems and build your portfolio, always base your decisions on the recommended guidelines. We remind you again:

It's fundamental to choose systems that have registered gains for at least 4 years with verified results. Also, once activated, you should not pause them under any circumstances (whether it's a new covid, a new president, or the next event that will test your discipline) until the full 2-year period has elapsed. At the end of these two years, it's the right time to review the best-performing systems and select again those you consider the best for the next two years.

While LiderBot's systems are of high quality, it's important to recognize that there are also other systems from our competitors that meet the mentioned requirements. Do not hesitate to consider them if they fit your investment strategy.

Lastly, remember that diversification always benefits those with more capital. The larger your investment, the more different and robust systems you can add to your portfolio, increasing your chances of success compared to a smaller investor.

We emphasize that it's not necessary to calculate to the millimeter how many systems you should select. It's preferable to opt for prudence over overexposure. In case of doubt, do not add additional systems. Remember the old saying: "Better the devil you know than the devil you don't." Caution is an ally in the world of investments. And, as strange as it may seem, at LiderBot, we want you to make money. We do all this to be number one, not just another one.

Javier González-Barros, CFTe

You might be interested in