get-returns.R

get-returns.R

library(tidyverse)

returns <- read_csv("data/returns.csv") %>%
  select(Year, equities_sp, treasury_10yr) %>%
  gather(key = "Asset", value = "Returns", -Year) %>%
  mutate(Asset = ifelse(Asset=="equities_sp",
                        "Asset A: High risk, high return",
                        "Asset B: Low risk, low return"))

set.seed(123)

samplingA <- function(periods){
  z <- filter(returns, Asset == "Asset A: High risk, high return") %>%
    dplyr::sample_n(periods, replace = TRUE) %>%
    select(Returns) %>%
    mutate(Returns = Returns + 1)
  
  return((prod(z$Returns) ^ (1 / periods)) - 1)
}

samplingB <- function(periods){
  z <- filter(returns, Asset == "Asset B: Low risk, low return") %>%
    dplyr::sample_n(periods, replace = TRUE) %>%
    select(Returns) %>%
    mutate(Returns = Returns + 1)
  
  return((prod(z$Returns) ^ (1 / periods)) - 1)
}

getReturns <- function(n){
  valA <- samplingA(n)
  valA <- valA[0]
  
  valB <- samplingB(n)
  valB <- valB[0]
  
  for (i in 1:60){
    zA <- samplingA(n)
    valA <- append(valA, zA)
    
    zB <- samplingB(n)
    valB <- append(valB, zB)
  }
  
  return(list(valA, valB))
}

getOrder <- function(val, name){
  tibble(returns = val) %>%
    arrange(desc(returns)) %>%
    mutate(id = rep(1:30, each=2)) %>%
    group_by(id) %>%
    summarise(returns = mean(returns)) %>%
    mutate(id = as.factor(id),
           asset = name)
}

getCharts <- function(n){
  val <- getReturns(n)
  
  bind_rows(getOrder(val[[1]], "Asset A: High risk, high return"),getOrder(val[[2]], "Asset B: Low risk, low return")) %>%
    ggplot(aes(x = fct_reorder(id, returns), y = returns)) +
    geom_col(width = 0.5) +
    facet_wrap(~asset, ncol = 2) +
    scale_y_continuous(sec.axis = dup_axis(), labels = scales::percent_format(accuracy = 0.1)) +
    cowplot::theme_minimal_hgrid() +
    theme(axis.text.x=element_blank()) +
    theme(text = element_text(size = 14)) +
    labs(x = "Annualized Returns", y = " ", title = paste0("Investing over ",n," Year(s)"))
}

returns.csv