[Sticky] Investment Definition
Currently (March 2020) we break out eight asset classes and then a catch-all "other" category. The eight are:
- Real Estate
- Private/illiquid stock
- Public Stocks
- Mutual Funds
- Retirement Accounts (401ks, IRAs, etc) that have withdrawal penalties
- Bonds & Debts
We handle each asset class slightly differently, as shown in the "Add an Asset" interface, with each having a different method for projection growth.
For public stocks, mutual funds, retirement funds and bond funds with ticker symbols, we use historic asset class performance from our partner FinMason (www.finmason.com). We then project those asset class performances into the future with the FinMason Monte Carlo model, and return the 50th percentile performance.
For more about Monte Carlo projections, please read this post: https://www.investopedia.com/terms/m/montecarlosimulation.asp
For Real Estate, we use the proxy VNQ, the largest real estate ETF on the market, and project growth from that ticker symbol as mentioned above.
If you don't have a ticker symbol for a bond or debt, we use the FinMason ticker BND. As above, we return the 50th percentile return from a Monte Carlo Analysis.
For non-cash investments that we don't have a ticker for (like if you just enter "401k" as a manually entered asset, or if you enter "Other" we use the ticker symbol VTI.
FinMason has a special cash asset class that we use to reflect the appreciation/depreciation of holding cash.
For Private Stock and Collectables, we don't automatically project growth in these investments. Because the market for these investments is so small, specialized and volatile, we simply hold the value you enter them into BodesWell with. You realize their appreciated value by selling those items with the "Windfall" event.