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URL:  https://boards.fool.com/brewer12345-wrote-does-any-of-this-take-into-18987380.aspx

Subject:  Re: The hocus plan: 4% from 100% FI? Date:  5/1/2003  1:47 PM
Author:  BenSolar Number:  104961 of 881214

brewer12345 wrote:

Does any of this take into account the level of interest rates? If not, then I'd be hestant to draw any conclusions whatsoever.

To borrow a page from the REHP dogma crowd, interest rates are included in the analysis to the extent that they have varied through the 130 years of stock market data covered in intercst's spreadsheet. And they are reflected in the inflation adjustment made each year to the withdrawal amount.

If you are leaning on the 'Fed Model' to justify current stock market overvaluations, you should reconsider. Read this paper: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=381480
Paper was discussed here: http://nofeeboards.com/boards/viewtopic.php?t=713

Short form: stock market yield is 'real' (already inflation adjusted), so there is no need to adjust stock valuations as interest rates change.

Regards,
Ben
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