Are the Rate of Return (ROR) defaults at all sane or usable in Pralana Online? In my testing, the Simple Portfolio Modeling setting has these ROR defaults: cash: -2%, and 3% for everything else. Advanced Portfolio Modeling has ROR defaults of: Cash: 1%, Stocks: 3%, Bonds: 3% (and 3% for everything else as well). Also also for advanced, the defaults are the same regardless if you chose real or nominal ROR.
I don't pretend to be an economist, but these defaults seem "off" to me. eg, why are stocks & bonds configured with the same ROR?
Yes, I am aware that you can change them, and I am aware that there is a whole section on this forum where people are sharing what they are using for RORs. That's not what I'm asking, which simply is: Are the defaults reasonable, and could you use them to generate "reasonable" models without having to change them? And if not, why not? Shouldn't the defaults at least be "reasonable"?
@larryc The defaults are not intended to be anything other than placeholders. We expect users of Advanced Portfolio modeling to define their own asset classes and enter their own RORs.
That said, if you will suggest reasonable values, I would be happy to use them. The default for Advanced Portfolio Modeling is that entered RORs are 'real', so the default RORs would need to be net of inflation. Most people use 2.5% or 3% for the general inflation assumption.
