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intercst wrote: hocus has been telling us for a year now that you can reliably take a 4% withdrawal from a 100% fixed income portfolio.

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.

From hocus' 'My Plan' post ( )



1) TIPS at 3.5 percent in tax-protected accounts

2) ibonds at 3.4 percent in non-protected accounts (not taxed until cashed in)

3) Certificates of Deposit still held from pre-retirement days (and, thus, held at higher rates than those available today.). The CDs are being phased out as they come due into other investment classes. I expect to move a portion of the CD money into stocks. If stock prices came down, I would move it all into stocks.

Stock Allocation Goal: My goal is to get to a 50 percent stock allocation. I initially made the zero percent allocation to stocks for two reasons:

(1) I accumulated all of my retirement stash in a short amount of time. It was nine years from having zero in the bank to retirement date. So any stock purchases made in anticipation of retirement would not have been "for the long term." My worst nightmare was that, one year short of my retirement date, stocks would go into a downturn. I was not counting the months until retirement, I was counting the weeks. There was no way I wanted to take the risk of losses that could put off the retirement date for years.

(2) Stocks were at extreme levels of overvaluation at the time I began accumulating large sums for investment. I preferred to put money ultimately to be allocated for stocks into safe investment classes until stocks could be purchased at prices closer to average valuations. That way, I can purchase many more shares for the same portion of my retirement stash. Once I find reasonable purchase points, I intend to hold the stocks for the long term (no "timing" in and out of the market).


Not listed there, but mentioned elsewhere in the post is the fact that he owns his home. So real estate can be added to the list.

So he has TIPS and I-bonds and real estate. All are inflation protected assets that do not fit under the 'Fixed Income' category. He also has a plan to buy stocks when valuations are closer to average. Here's a news flash: they are still overvalued.

In my post 'The Hocus Plan: 2% SWR?? ( ) I examined the effects of a stock switching strategy similar to the one described by hocus. My conclusion: history backs hocus up, his valuation based switching strategy from 0% stocks to 50% stocks worked in the past, and in fact beat the static 'optimal allocation'.

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. So why can't the 10-15 people who like to spout the cr@p like the quote above just grow up and lay off the elementary school tactics.


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