Investment Simulator

Scraping of prices of the S&P 500 index and simulation of the result of an investment in it.

Industry

Finance

Problem

There is a necessity for a tool to simulate the result of a diversified investment in the US capital market in a personalized way. To perform this kind of simulation, the data needed are:

1. Rate offered by the market
2. Initial capital
3. Amount of periodic contributions
4. Investment horizon

Parameters from 2 to 4 are defined by the user. Meanwhile, the rate offered by the United States market for a diversified and passive investment¹ is generally represented by the compound interest rate of the S&P 500 index.

Project objective

Extract the daily closing prices of the S&P 500 index and make it available in a centralized database, which serves as a supply for the calculation of the annualized rate of return, defined as a compound interest rate ². This outcome, processed in a python script together with the parameters entered by the user, determines the estimated result (final capital) of the investment.

Implementation process

1. Obtaining data from external sources:
   • S&P 500 price (Source: Yahoo Finance)
2. Python script development
   • Incremental ETL
   • Automation: frequency -> once a day
   • Calculation of compound interest rate
   • Calculation of final capital
   • Storage of simulations carried out in csv file
3. Script testing
   • Black Box Tests

Diagram

Results

• Historical data of the S&P 500 index with incremental loading every 24 hours, centralized in a CSV file
• Calculation of interest rate up to date
• S&P 500 investment simulator
• Error handling and alerts

Side projects

• Tableau dashboard of S&P 500 index prices³

Notes

Footnotes

1. Passive investment is the one that requires the minimum effort on the part of the user or no management by third parties. ↩

2. Compound interest is the interest on a deposit calculated based on both the initial principal and the accumulated interest from previous periods. More Information ↩

3. A brief analysis and viz of S&P 500 index prices can be seen on this Tableau dashboard I made ↩