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quite a bit wrong in what is said about the 4% swr …
including the fact he says it is based on a study in 1990 …the trinity study was 8 years later in 1998 and it has since been updated more recently
so that is incorrect along with the other assumptions in the article.
for a 4% swr to hold one needs a 2% real return average over the first 15. years of a 30 year retirement .
over the last 123 rolling 30 year time frames we had , using a simple diversified portfolio of 60/40 or 50/50 has ended with more then one started 90% of the time using simple index funds .
all the gibberish about closed end funds is just that , a lot of gibberish.
also bill bengan the guy who looked in to safe withdrawal rates with his safemax did go on record as saying the 4% swr was likely wrong .
in practice it could be 4-1/2% more often then not , so the 4% swr is still alive and well
Last edited by mathjak107; 08-21-2023 at 06:43 AM..
quite a bit wrong in what is said about the 4% swr …
including the fact he says it is based on a study in 1990 …the trinity study was 8 years later in 1998 and it has since been updated more recently
He also said that he has since disavowed that POV. I know your perspective on the 4%, and actually thought about that when reading this article. I guess my question is more related to better understanding CEF's, if they are a good investment for retirement, if the return is as likely (nothing is guaranteed) as suggested, what are the risks, etc.?
I'd like to avoid turning this into a debate about 4%, as that's not the point of the discussion.
Most CEFs use leverage. I've read PTY is 47% levered. I would want to buy a CEF when it is trading at a discount to NAV and when interest rates are low. The good thing about CEFs is the investment pool is fixed so theoretically the fund manager can take a longer-term approach.
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