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No. of Recommendations: 11
CC on hocus: I betcha if you posted a starting thought for what it is you actually want to say, you may actually find yourself in the midst of "uninterrupted discussion."

Most of what I get from hocus is

1) Use historical data for analysis

2) All the models that use historical data are not correct for the future

3) The board should do all the work since hocus isn't mathematically inclined or able to analyze things.

4) Hocus has a 'feeling' that 2% withdrawal might work, but is taking 4% from his 100% bond/CD/MMF portfolio, despite his claim be believes people should have some equities. This, by itself, can be shown over nearly every 30 year period to have 'failed'.

Thus, for someone whose portfolio is already doomed, and who is taking nearly twice the safe withdrawal rate based upon "historical data" to argue that the models are wrong, and that going forward one should put the hocus factors (notably investors panic and sell all their stocks, wiping out their long term gains, immediately paying any taxes due, and then being 100% in bonds/CDs/MMF), seems strange.

Hocus seems to fail to see that historical data could care less about 'investor sentiment' or unemployment or any other factor. All of those resulted in actions, which then influenced the value of equities. If people panicked and sold, then stocks dropped at that point. If people 'bought', the prices went up. Plain and simple. All that is already 100% reflected in the historical data. BUt hocus wants a 'fudge factor' applied to 100% accurate historical data?????

Yes, no one knows the future. IF it isn't anything like the past, then obviously trends that continued over 150 years of market history will be different. But neither hocus or the folks on the crystal ball board have a clue as to what returns on ANY investment will be over the next 30-50 years.

If I recall right, most say that the probability of things continuing the way they are for the next 30-50 years are likely no better than 85 percent...So if you have 99% probablity in your portfolio survival, you have to look at other factors (like asteroids, supervolcanoes, nuclear war, mass illness, civil war, tsunamis, etc) which limit the top end of the probabilites to less than 100%.

We've had doomsayers (the end of the earth is near)...predicting impending crashes every five years for the past 100 years.....and others predicting DOW 50,000 or 100,000.....

Most of us will take the historical data, and go from there.




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