Dow Jones Index in the future

Happy New Year 2008. Wishing you a prosperous year of 2008 and years after.

I was again playing with random numbers simulation and found everlasting properous years of Dow Jones Index in the future.

Bear in mind, this is just a rough simulation played to get rid of boredness in the first day of 2008.

The process is as follows:

  1. Gather Dow Jones Index daily prices since 1-Oct-1928 and calculate the mean and standard deviation.
  2. Using NORMINV(rand(), cumulative mean, cumulative stdev), simulate the daily return.
  3. Using Price n * (1 + simulated daily return), estimate Price until n equals to 1-Jan-2100.

That's it. Easy.


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