Need Help with Assets During Retirement

[mathjak107]

Originally Posted by jdhpa

Some strategies do better in bull markets, others in Bear markets. My only point was that when calculating returns, it needs to cover a complete market cycle, and ideally exactly a cycle, to get accurate results.

this is the short shortsightedness many have ..they benchmark only off the highs ..yet we would never expect to catch the exact high selling a stock . we actually spend 80% of the time between the last low and last high .

that means there are are quite a few less equity intense portfolios that make money in up and down markets that end up at the same point in the road with a whole lot less riding up to the peak and falling in the valley .

jrkliny and i have been tracking a comparison for quite a while through the boom and bust of last year through the recovery back . the one with the highest equity level is still behind .

we have a traditional 60/40 up 3.3% since we started tracking .

the 40% equity golden butterfly , with 20% gold 20% long term treasuries and 20% cash instruments is up 6.60%

the 25% equity permanent portfolio with 25% gold , 25% long term treasuries and 25% cash instruments , up 10.90% . gold was up 21% for the year and long term treasuries 26% so they ran with the ball . the total market fund for the same cycle was up 9%

in actual practice winning can be by not losing as volatility is not your friend over a cycle , only in a bull .

it does not matter how many up years you have , all that matters is what your balance is at the start of a recovery and how much will it take just to get back .

there is a big difference in portfolio values depending if you are measuring from the highs ,the lows or at any point in between when in real time .

so when comparing portfolios that can make money in up or down markets , you can't compare them unless you complete the cycle .

[mathjak107]

Originally Posted by mathjak107

this is the short shortsightedness many have ..they benchmark only off the highs ..yet we would never expect to catch the exact high selling a stock . we actually spend 80% of the time between the last low and last high .

that means there are are quite a few less equity intense portfolios that make money in up and down markets that end up at the same point in the road with a whole lot less riding up to the peak and falling in the valley .

jrkliny and i have been tracking a comparison for quite a while through the boom and bust of last year through the recovery back . the one with the highest equity level is still behind .

we have a traditional 60/40 up 3.3% since we started tracking .

the 40% equity golden butterfly , with 20% gold 20% long term treasuries and 20% cash instruments is up 6.60%

the 25% equity permanent portfolio with 25% gold , 25% long term treasuries and 25% cash instruments , up 10.90% . gold was up 21% for the year and long term treasuries 26% so they ran with the ball . the total market fund for the same cycle was up 9%

in actual practice winning can be by not losing as volatility is not your friend over a cycle , only in a bull .

it does not matter how many up years you have , all that matters is what your balance is at the start of a recovery and how much will it take just to get back .

there is a big difference in portfolio values depending if you are measuring from the highs ,the lows or at any point in between when in real time .

so when comparing portfolios that can make money in up or down markets , you can't compare them unless you complete the cycle .

the other factor is the amounts you have accumulated .. you may not have had much to invest back in 2008 when markets were at their lows so dollar wise you had the bull working on less money as you dollar cost averaged in over a decade .

a drop now would be on a whole lot more money that will see the down side then saw the upside growth .

so , yep , from a real world stand point most have skewed benchmarks .

[TuborgP]

Originally Posted by mathjak107

the other factor is the amounts you have accumulated .. you may not have had much to invest back in 2008 when markets were at their lows so dollar wise you had the bull working on less money as you dollar cost averaged in over a decade .

a drop now would be on a whole lot more money that will see the down side then saw the upside growth .

so , yep , from a real world stand point most have skewed benchmarks .

Very true and my reality with a much shorten time horizon than 2008.
This now a gut reality check for many of us as we age.

[lottamoxie]

Originally Posted by mysticaltyger

Start researching the 4% rule. The basic gist is you can take 4% out of your portfolio and adjust upward for inflation every year and you have a 90% chance of it lasting at least 30 years. In most time periods, you'd end that 30 year period with much more in inflation adjusted terms than you started with. A lot of people argue incessantly as to whether the 4% rule hill hold up in the future as well as it has in the past. The truth is, no one knows.

{snipped for space}

You consistently provide sound, level-headed and easily understood advice that can benefit everyone. So much appreciation! I've saved several of your posts over the past few years.

[mathjak107]

Originally Posted by TuborgP

Very true and my reality with a much shorten time horizon than 2008.
This now a gut reality check for many of us as we age.

time frames leading in and leading out matter . you can't isolate a date range without considering the time frame leading in .

people always say how lucky boomers were since the greatest bull in history was in their life time . but the years leading in were some of the worst in history , so not only did few regular people have money saved or invested but 401k's did not exist yet . so it did little good for most of us mortals . it wasn't until the mid 1990's that i got some real traction and then 2000 came .

[TuborgP]

Originally Posted by mathjak107

time frames leading in and leading out matter . you can't isolate a date range without considering the time frame leading in .

people always say how lucky boomers were since the greatest bull in history was in their life time . but the years leading in were some of the worst in history , so not only did few regular people have money saved or invested but 401k's did not exist yet . so it did little good for most of us mortals . it wasn't until the mid 1990's that i got some real traction and then 2000 came .

Bada Bing. Early Boomers at this stage of the game have had a 40-50 year investing timeline. A lot of crap and a lot of good over that time horizon.

[zach_33]

There seem to be some useful heuristics (4% draw down, 60/40 balance, long term health insurance, etc.)... are there any good reference books out there that break down all these nuggets of wisdom? Practical advice for the saver who is reluctant to pay a financial advisor ad valorem?