Hi team, I'll be on Rob Berger's youtube show (300k subscribers) on Tuesday Oct 14 at 2pm eastern US time. I'll re-read the thread here from his Pralana review about ten months ago, as well as his Pralana vs Boldin vs ProjectionLab comparison. Please let me know any salient points I should make. I think the context is just how I use Pralana for clients with Emanciparé. You can set a reminder here https://www.youtube.com/live/vUuiVzvwdVc?si=bSffRTcm-uMRIQEe Thanks, Bill
A big part of his focus is (rightfully) about the different monte carlo results with projection lab and with boldin. Boldin I think has its exact ror and sd numbers hidden from users; and they also completely revamped their monte carlo since his video. With Projection lab, at time 6'56" I noticed he's using PL's 8% return 16% sd for stocks, and 3% returns 2% sd for the bonds for the monte carlo. Was Pralana set up with these same figures in his monte carlo comparison (or did he rely on Pralana's default)? As we know in pralana you have to set SD separately in the tabs if you want to use your own, and it's not something many people do. I also see in his video that Projection Lab incorporates separate monte carlo for inflation (in PL: 3%, sd 8%) and dividend yields (which Berger doesn't use), neither of which Pralana does. The SD especially might account for the difference in success he's pondering.
My concern with Pralana's competitors are their inability to keep asset allocation constant in a tax efficient portfolio where you preferentially put bonds in tax deferred. A lot of people practice this tax efficient asset location and as far as I know, Pralana is unique among commercial consumer tools in its ability hold overall asset allocation constant which is the only way to do proper comparisons.
Because of this shortcoming, Pralana's competitors will give you wrong answers for things like Roth Conversions as they see the low returns in tax deferred (due to lots of bonds) and high returns in Roth (due to stocks) and so recommend overly large Roth Conversions that end up really just chasing the higher average return of stocks because those programs failed to hold the overall asset allocation constant. The only way those programs work is to have the same asset allocation in all accounts, which is not a very tax friendly thing to do and not useful to people that actually hold a tax efficient portfolio.
I don't think Ron Berger understood this in his review and would like to see a deeper dive.
