Monotonicity of savings function in Endogenous Gridpoint Method with stochastic portfolio returns

This paper provides a comprehensive proof of monotonicity of the savings function in the application of the Method of Endogenous Gridpoints (EGM) to problems with stochastic portfolio returns. The proof contributes to the completeness of solutions by providing the sufficient condition for the application of EGM to problems with stochastic portfolio returns as seen in the literature. •We provide the proof of monotonicity in EGM with stochastic portfolio returns.•This strengthens the method’s robustness and the completeness of solutions.•The result can easily be extended to more complex models.