3 ms·
IIRC the Trinity study (where the 4% SWR comes from) was for portfolios with a decent chunk of bonds? And that it only claimed that SWR for a horizon of 30 year
by ericd 7y ago
IIRC the Trinity study (where the 4% SWR comes from) was for portfolios with a decent chunk of bonds? And that it only claimed that SWR for a horizon of 30 years? As in, running to zero in 31 years was counted as a success.
Separately, not to rain on your parade, but I'd really be worried that 4% might not be feasible based on current market conditions - that study was based on a period when the US was rising into the role of world superpower, and most of the industrialized world had just been decimated.
- JMTQp8lwXL 7y agoThat skepticism is valid. 3.5% might be the new 4%. Personally, I don't worry too much about returns because even though U.S. standing has declined, our returns have been incredible, mostly due to stock buybacks. Corporations have been the net purchasers, by a significant margin, in the past decade [0], somewhat driven by debt and specifically, low interest rates. Returns are increasingly untethered from actual performance. For these reasons, the U.S.' waning hegemony may not lower returns. [0]: https://seekingalpha.com/article/4271159-corporations-biggest-net-buyers-of-stocks-since-2014 https://seekingalpha.com/article/4271159-corporations-bigges...