An Investment element tracks the value of an investment. To do so, it keeps track of specified purchases and sales. However, the key input to an Investment element is a description of the growth of the investment's underlying unit value (e.g., the price of a stock).
The "Growth Definition" portion of the Investment dialog is used to specify the Unit Value of the investment:
For example, if the investment represented ownership of shares of a stock, this would be the share price.
This value must be a scalar with dimensions of currency. The Unit Value must always be a positive number.
Typically, the Unit Value will be a time series function. This can be any function, but will often be the output of a History Generator element. This element (which is part of the basic GoldSim framework), provides a variety of alternatives for generating time histories, including simply specifying a constant annual growth rate, and specifying a stochastic growth rate (defined using a mean annual growth rate and volatility, and simulated as a Wiener process).
The History Generator also supports specification of correlation matrices, which allows you to specify the correlations amongst a portfolio of investments.
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