Computerized Investing > January 7, 2012

Investment Risk Analyzer

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Investment Risk Analyzer runs directly in Microsoft Excel. As the name implies, the program allows you to evaluate your investments and see how your portfolio is allocated among stocks, bonds and Treasury securities. The program will generate your expected return and risk using the data you input.

Investment Risk Analyzer opens directly in Microsoft Excel. Excel macros must be enabled for the program to work properly. In newer versions of Excel, you can enable macros by clicking on “options” at the top after opening a file that requires macros.

Cells that are color-coded in blue require user inputs. Any other cell values are generated automatically. Under Investment Information, enter your investment balances and annual investment amounts. There are categories for bond and Treasury, mixed, and stock. The program is designed so that stocks tend to move in the same direction in any given year, and the mixed category is programmed to be the average of stock and bond funds.

Under Historical Performance Data, enter the average return and average standard deviation of each investment. Both of these averages should be calculated over at least a 10-year period. The values may be hard to obtain, so a worksheet is available to help you calculate an approximation. The worksheet allows users to enter up to 30 years of share prices. The percentage gains and losses, as well as the standard deviation, will be calculated.

After entering all the required information, you may evaluate your portfolio. Varying the amount of money in each investment will allow you to observe the amount of change that could occur within your overall portfolio. The program will display a “Min Year” (how much you can expect to lose during a very bad year) and a “Max Year” (how much you can expect to gain during a very good year) for each investment. Over the long run, stocks with higher returns and standard deviations should generate more return than bonds with lower returns and standard deviations. However, bonds have lower min years, making them safer. For investors with a short time horizon, it may be more beneficial to invest in holdings with a lower standard deviation. You are able to constantly recalculate to see the effects on your portfolio during a down year.

Investment Risk Analyzer is currently available free of charge.

Investment Risk Analyzer

System Requirements: Windows 98 or newer; Microsoft Excel

Price: Free


Chance from WA posted over 6 years ago:

Many of us would like more effort in providing download content that is universal in application. This Excel file looks very interesting but is not functional for those of us who use iMac as our preferred computer technology, though I may not be aware of a simple workaround.

MS Office for Mac includes the Excel application but it seems the Mac version is intentionally different in some capabilities or limited by operating system design. Excel Workbook developers would be hailed as visionary if they would avoid using Excel elements that function in only one version of Excel.

A developer who is capable in the use of the Mac version of Excel should be able to produce a Workbook able to deliver the output of the Investment Risk Analyzer.

Mac can run Windows but many Mac users consider the extra expense to take a step down in system reliability and security to be a poor investment.

If not already done, AAII may gain some insight by conducting a survey to identify the level of Mac use within its membership. If such a survey has been done, depending on the age of the survey, it may be of interest to repeat the survey in view of Apple's growing appeal and market share.

AAII Life Membership is good.

BILL from FL posted over 6 years ago:

It is shortsighted of any Excel worksheet developer not to create their work for universal usage. Apple computer sales have grown faster than the PC market for the past 22 quarters, and the Apple share of the market continues to expand, while the PC share is actually shrinking. Apple users constitute a significant share of today's market, and to ignore them can only be because of either ignorance or impertinence.

Many Mac users (this writer included) have dual OS systems and can easily run both Mac and PC programs, but I personally avoid using any PC only programs that I can live without, and that includes this spreadsheet. It is insulting for an Excel writer to deliberately exclude Mac users, when it is so unnecessary.

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