WORKING WITH IMPERFECT MODELS

Regardless of how effective a model may be, an important point to remember is that our models are all simplifications of reality based on our understanding of it. Inevitably, simplifications in our simulations will leave out inputs or information that can help inform investment and risk decisions. It is important to remember this when evaluating model results: Our simulations are created to help guide us, not to dictate our actions. A good modeler is confident in the model's results but is conscious of the model's shortcomings and is willing to consider information that the model may not take into account.