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No. of Recommendations: 9
John3haha writes:

OK, if you need convincing

No convincing needed here. Exceptional long term returns are to be expected as a possible result of taking exceptional risks. The returns intercst quotes are theoretical. They assume that mere mortals can withstand the kind of volatility associated with such a portfolio. Perhaps there are some who can, but I know of few people who have held a 100% equities portfolio for 30 years.



I would argue that, during one's accumulation mode, there is an even stronger incentive to be 100% in eqities.

It all depends. Do you want to be certain of retiring early? Do you want your plan to have a high probability of actually working? What if after holding for 20 years, you discover that your portfolio of equities has returned only 3.3%? (This has happened in the past) or perhaps watching 50% of your portfolio dissappear over a short period of time causes you to question the sanity of following such a course and you bail out. (you will not be the first who underestimated his tolerance for risk) So much for early retirement. By diversifiying out of equities you may have to wait a little longer to retire early, but you may have a much higher probability of succeeding.



FIRE Wannabes should be in accumulation mode.

Can't argue with that.



Intercst is a wonderful, awesome resource at TMF when he writes about FIRE. This kind of post is why it can be worth reading the REHP board

Yes, he has predicted the past with remarkable accuracy. By remaining single, living in a small apartment and having the good sense to retire just before the greatest stock market boom in history, intercst has managed to stay retired. May you be as lucky.

Regards,
FMO
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