Forio teamed up with Dr. Sam Savage of Stanford University to design and develop an online version of his Excel-based investment portfolio game.
The game is based on examples from his book The Flaw of Averages. The model uses a Monte Carlo method to simulate stock market positions based on historical data. Players adjust a portfolio across US stocks, emerging markets, global bonds, global real estate, and cash equivalents, seeking to achieve an average return of at least $120 while minimizing the chance of losing $5. Anyone can play the simulation, and then see where their results rank on a public leaderboard. The goal is to illustrate the concept of “flawed” averages, that is, the idea that “plans based on average assumptions are wrong on average.”
Experience this simulation.