Generator - The Financial Version
Software for Financial Spreadsheet Optimization
by New Light Industries, Ltd.
What Can Generator - T.F.V. Do?
Generator - TFV solves complex problems on which you might ordinarily use a trial-and-error approach.
Many people use a spreadsheet such as Excel to analyze a stock or bond portfolio. Often they play "what-if" by adding and subtracting securities or assets to try to achieve an increase in returns or a reduction in risk. The larger the portfolio or the greater the number of constraints, the less likely that an optimal solution can be found by trial and error. Generator - TFV can optimize any financial problem that can be set up on an Excel worksheet. For example it may used to:
- optimize stock or bond portfolios for return/risk tradeoffs
- structure portfolios to track specific indexes at the lowest cost
- develop market trading strategies
- identify efficient transactions for portfolio balancing
- optimize yield/return mix within portfolio constraints
- analyze alternative tax strategies
Why use Generator - TFV Simply put,Generator - TFV solves problems that might be difficult (or nearly impossible) to solve any other way.
Generator - TFV can increase your profits by optimizing your portfolio.
What is Generator - TFV?
Generator - TFV grew out of developmental work on Genetic Algorithms, proven to be a powerful problem solving technique. Genetic Algorithms are being used to solve problems in a wide range of disciplines. The problem solving process Generator - TFV uses is called a Genetic Algorithm because it is the software equivalent of evolution.Over 500 research articles were published in 1994 alone on Genetic Algorithms; interest in these computer programs is widespread and increasing.
Why use Generator - TFV?
If you have ever tried to optimize your portfolio by trial and error you know how frustrating it can be. Just as you make a little progress by increasing the amount of one holding, you realize that some other holding is more important. Generator - TFV takes the guess work out of financial worksheet optimization. It harnesses the power of evolution to do the work for you.
If you have tried the solvers that come with spreadsheet software you know that they are linear problem solvers and often do not work on more complex problems.Generator - TFV is designed to work efficiently with the complex financial problems that people deal with
Generator - TFV is the most powerful and flexible product of its type on the market. It will work on problems involving hundreds of investments. Generator - TFV gives you a high level of control over improvement strategies allowing it to be tailored to each problem. Detailed examples in the user's manual provide advice and insight into fine tuning the software.
An example of portfolio optimization based on a prediction model on an Excel worksheet.
How does Generator - TFV work?
The first step is to lay out a portfolio (or other financial problem) on an Excel worksheet. Your worksheet must calculate one value that is a measure of how well your portfolio achieves the investment objective. We refer to this value as the target value. Examples of a target value on a worksheet are a portfolio s risk-to-reward ratio, its expected future value, expected standard deviation, etc.
After you define your problem in Excel,Generator - TFV gathers information from your worksheet, then provides a list of all the variables on your worksheet with defined names. You identify the variables on the worksheet that impact the target value - the value you
want to optimize. Generator - TFV reads the values from your worksheet and then creates a set of trial solutions. Only the variables that you choose will be modified while Generator - TFV searches for the best solution.
After you set up the problem, you click the green light on the toolbar and let Generator - TFV go to work.Generator - TFV then efficiently explores the set of possible solutions in order to find an optimal solution.
Generator - TFV finds the best solution for your problem.
A demo version of this program is available on the demos page.
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