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Im very disappointed in his ethics but he still is a very very smart guy.
I put no stock in back testing anyway so to me its meaningless going forward. I still like the bucket system he uses.
It still wasnt right to make claims not tested because some folks might have used him as an advisor based on his past data although they have to be silly to go by anyones back testing.
As they say the past may be very different then the future
other retirement withdrawal strategies would have been worse- with the funds drying up earlier. The portfolio expiring in 1989 assertion is not because assets plunge to zero in value due to investment declines- its because of systemic annual withdrawals for retirement income. It was just an illustration where those in audience were told the 3% rate was not the true rate. It was all for comparison between methodologies - no one was told the 3% was the actual rate. The assumptions that went into the slide for the seminar were known to audience members who listened.
In reality the portfolios under good use of the strategy would be adjusted periodically if inflation above 3% occurred.
no one has been a bigger champion for ray than me . im very disappointed in his ethics is all i can say.
the inflation figure he used wasnt my issue. thats fine as we all use 3% as a long term average. .
my problem is two fold.
ill speak for myself: i consider myself a knowledgable investor. as such i pay very little attention to back testing and what was . i pay a whole lot of attention to the present and the future and for decades now i
have been adjusting things for the big picture and not what was.
BUT!!!!!!!! you have a hole bunch of financially retarded folks out there that depend on others and their knowledge . these folks didnt expect to be the test pilots for a system when they hired ray.
they expected a fully functioning aircraft that has been tested in all kinds of scenerios before they fly it.
these clients didnt get that testing . whether it does any good or not going forward they did it based on signing on to a system that had been thoroughly tested
part 2 is i didnt like the way he skirted the back testing issue in his rebuttal on his website.
he didnt even address it. he just focused and talked about the 3% inflation figure.
know what i would have said if i was ray.
the system works because we never had a 15 year time frame where markets werent higher at some point and you can refill.
the entire system revolves around that premise .
had he just demonstrated that fact which by the way is true, i would have at least said okay then if thats true then everything else in the bucket system is based on that fact so there isnt a whole lot more to back test.
but he didnt even address it and that was wrong.
like i said in other threads, the man is very smart and the system does have a strong basis for working but i dislike unethical people in the financial business and i can no longer recommend him or his strategys on that basis alone.
I heard his commercials back in the day. I thought it was stupid just based on the idea that his system was called, "the bucket strategy." It just sounds stupid, lol. I mean c'mon at least think of something cool to call it.
While I think he's a bit of a tool (I worked with him for from 2009-2011) and kinda sleazy, the SEC really doesn't have much of a case here. He's not really lying to investors and what he's saying is pretty simple Asset Allocation strategies. He doesn't make any specific investment suggestions, just that investing in diversified buckets of money will protect you in the long-run, which is common knowledge amongst those of us in the industry and a significant part of the Series 7 and Series 65 exams...both of which he had passed.
Plus, their assertion of the AIR is asinine. We've been using 2-3% in the industry for the past 7 years...it may have been 4+ before, but not since then. And that 3% rate...it's on the freaking SEC website.
It's weird that they'd go after him and not the people responsible for the 2008 crash...
I did analysis work for his B/D before moving on to a different broker. I only personally dealt with him a couple times, but he was always one of those guys who expected everyone to bend over backwards for him and drop whatever they were doing to serve him.
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