How Kumberi Models Market Uncertainty
How historical market data and projection paths are used when you model a UK life-and-money decision. Educational ranges, not a forecast.
What Are Market Scenarios?
Market scenarios are tools that help you understand how your retirement savings might perform under different economic conditions. Rather than relying on a single assumption about future returns, scenarios let you test your retirement plan against various market environments—from strong bull markets to challenging bear markets and everything in between.
No Predictions, Just Possibilities
How Our Market Data Works
Data Extension Methodology
Retirement planning often requires projections spanning 30, 40, or even 50+ years. Since no single historical period covers such long timeframes, we use a sophisticated data extension approach:
Start with Historical Data
Each scenario begins with actual market returns from UK and global indices (FTSE 100, FTSE All-Share, S&P 500, etc.). This forms the foundation of your projection.
Cycle Through Patterns
When your retirement timeline extends beyond the historical data available, the system cycles through the established pattern. For example, if a scenario covers 30 years of data and you need a 60-year projection, years 31-60 repeat years 1-30.
Maintain Realism
This approach preserves the actual volatility, recovery patterns, and market behavior observed in history, rather than relying on simplified average returns.
Example: 55-Year Retirement Plan from 11-Year Scenario
Modern Bull Market Cycle (2009-2019) extended for full retirement
How it works: If you're 35 and planning to 90 (55 years), and choose the Modern Bull Market scenario (11 years of actual 2009-2019 data), the system cycles through those 11 years five times to cover your full retirement timeline.
Types of Market Scenarios
Multi-Phase Economic Patterns
These scenarios combine multiple market phases to create long-term projections suitable for retirement planning. Each includes periods of growth, downturns, and recovery—mirroring real economic cycles.
Examples:
- • Financial Crisis Extended: 30-year projection showing crisis, recovery, and renewed growth
- • Comprehensive Economic Cycle: 55-year pattern covering multiple boom-bust cycles
- • Conservative Long-term Growth: Steady returns with periodic corrections
When to use: Choose a projection scenario that matches your risk tolerance and expected market conditions over your retirement timeline.
Actual Market Returns 1920-2024
Real annual returns from UK and global markets, capturing exactly what happened during significant historical periods including the Great Depression, World Wars, Oil Crisis, Financial Crisis, and COVID-19 pandemic.
Coverage:
- • UK periods: 11 distinct periods (1920-2024)
- • Global periods: 6 periods (1970-2024)
- • Includes inflation rates and dividend yields from each period
When to use: Select a historical period that resembles conditions you expect, or use for stress-testing your plan against actual past events.
Market Categories
All scenarios (both projection and historical) are categorized by market condition. This helps you find scenarios matching specific economic environments:
Bull Markets
- • Stock prices rising 20% or more
- • Strong GDP growth
- • Low unemployment
- • Investor optimism
Use to understand portfolio performance during economic prosperity
Bear Markets
- • Stock prices falling 20% or more
- • Economic slowdowns or recessions
- • Rising unemployment
- • Investor caution
Test whether your savings can withstand downturns and recover
Crisis Periods
- • Rapid market movements
- • High volatility
- • Economic shocks (pandemics, collapses)
- • Severe short-term losses
Prepare for worst-case events and understand plan resilience
Mixed Markets
- • Alternating growth and decline
- • Realistic boom-bust cycles
- • Moderate volatility
- • Periodic corrections
Often the most realistic view of long-term market behavior
How Market Scenarios Benefit Your Planning
Realistic Expectations
See how your plan performs under various conditions, not just optimistic assumptions. This helps set realistic retirement goals.
Stress Testing
Test your retirement strategy against worst-case scenarios like bear markets and financial crises to identify vulnerabilities.
Informed Decisions
Compare different scenarios to understand how market timing, portfolio composition, and withdrawal strategies affect outcomes.
Confidence Building
Seeing your plan succeed across multiple scenarios (including challenging ones) builds confidence in your retirement strategy.
UK-Specific Context
Historical UK data includes Brexit, UK-specific crises, and FTSE performance—relevant for UK retirement planning.
Long-Term Perspective
Projection scenarios extending 30-55 years help you plan for the full duration of retirement, not just the early years.
How to Use Market Scenarios
- 1
Start with Projection Scenarios
Choose a projection scenario that aligns with your risk tolerance. Conservative planners might start with "Conservative Long-term Growth," while others might use "Comprehensive Economic Cycle."
- 2
Test Against Historical Crises
Run your plan through historical crisis periods (Financial Crisis 2008, Great Depression, etc.) to see how it would have performed. If your plan survives these, it's likely robust.
- 3
Compare Outcomes
Look at your projected portfolio values, drawdown risks, and pension outcomes across different scenarios. Wide variation suggests you may want to adjust your strategy.
- 4
Adjust Your Plan
If certain scenarios show concerning results, consider adjustments: increase savings, delay retirement, reduce expenses, or modify your investment strategy.
- 5
Review Regularly
As market conditions change and you get closer to retirement, re-test your plan with different scenarios to ensure it remains on track.
Important Information
Not Financial Advice: These scenarios are educational tools to help you understand potential outcomes. They do not constitute financial advice. You may wish to speak to a regulated financial adviser for personalised guidance.
Past Performance: Historical data and scenarios based on past patterns do not guarantee future results. Actual returns may be significantly different.
Limitations: While we use comprehensive historical data, scenarios cannot predict unexpected events, policy changes, or structural economic shifts.
Regular Review: Your retirement plan should be reviewed regularly and adjusted based on changing circumstances, goals, and market conditions.
Further Resources
For more information about retirement planning and market analysis: