The Motley Fool Discussion Boards

Previous Page

Politics & Current Events / Retire Early CampFIRE


Subject:  Re: The hocus plan: 4% from 100% FI? Date:  5/1/2003  3:48 PM
Author:  workwayless Number:  104989 of 881679

Ben wrote,

This type of BS has been the largest contributor to the circus-like atmosphere that has surrounded hocus for the last year. Intercst, of course, isn't the only one to make statements like this. In fact they come so fast and furious from so many different people that a casual reader would swear they are true.

Ben, I appreciate your attempt to clarify the Hocus plan. I would agree with you that a lot of BS has been flying around in the last year surrounding hocus in the last year. He's thrown his share of it around too, saying that a 4% SWR from a 75 stock/25 bond will certaintly fail.

However I wouldn't categorize the Intercst statement as a part of that BS.

TIPS, ibonds, and CDs? Come on, I think you are splitting hairs not to describe those as fixed income assets! Even though TIPS and ibonds are inflation protected you'd be hard-pressed to draw a yield that would allow a 4% SWR rate over the long haul. In addition, most people are not in the position to count their personal residence as a part of the portfolio because they would have to willing to sell in order to cash in on it.

Hocus is the only person I know (if only via message board) who has completely opted out of participation in the stock market bubble. And you know what? He has benefited immensely from doing so.

Just because Hocus opted out of the stock market and benefited from it in the short run, I don't think this is any reason to give his plan an endorsement. There's that old saying that even a broken clock gives the right twice a day. Hocus says he wants to stay out of stocks until prices are closer to average valuations. The trouble is that by that time those stocks might be a lot more expensive to buy...

Copyright 1996-2019 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us