Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (78) | Ignore Thread Prev | Next
Author: warrl Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5069  
Subject: Re: FIRE Benchmarks Date: 9/24/2003 2:25 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 7
Brewer,

It comes down to hope for the best, plan for the worst. Or in this case, plan for a sort of middle ground.

Whether you want to accept that low predicted returns for the next few years is true or not, or instead believe that that is taken into account with the SWR studies, it can simply come down to it not being safe to plan on the best case scenario of what is safe based on high past returns.


I agree - how about if we do the opposite?

How about if we plan on the WORST case scenario of what is safe based on LOW past returns? Specifically, the worst 30-year period in the past century (and longer)?

If you do that, you get...

Intercst's safe-withdrawal-rate study.

The one you say is wrong.

The one that says an initial withdrawal rate of a bit under 4% (with the withdrawal amount adjusted for inflation in subsequent years) from an efficient-frontier portfolio, survived the worst 30-year period in the past century (and more) with the final-year withdrawal unmolested.

The one that doesn't talk about best case, and doesn't say much about average case, but is heavy on worst case.
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (78) | Ignore Thread Prev | Next

Announcements

Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:
Apple

Wal-Mart Nixes Apple Pay
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement