Leverage simulation

Method:

• Data: daily historical prices of the SP500 index starting in 1927 obtained from yahoo finance
• The leverage is applied daily like it would with a leveraged ETF
• For each simulation-run, a timeframe of n_years consecutive years is randomly selected
• For each run and for each leverage-value, the multiple of the return is calculated
• This is repeated n_simulations times
• The distribution of outcomes is analyzed

Purpose:

• Just out of curiosity estimating the effect of leverage on a pension portfolio (see this book). (Needless to say, this is not investment advice.)
• Testing ChatGPT to code faster: it's quite useful for creating plots and refactoring