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James Montier on Asset Allocation in a Time of High Valuations

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  • James Montier on Asset Allocation in a Time of High Valuations

    James Montier is a strategist I admire at GMO. He is interviewed in Barron's today:

    http://www.barrons.com/articles/coping-with-the-foie-gras-stock-market-1501305385.

    (If you don't subscribe you can copy/paste the article title into your search bar and obtain access.)

    As with the Bob Rodriguez interview posted previously, I thought that this would be of interest to the minority of forum participants who are value investors. As before, I know most of you are indexers and EMH-believers. I'm not trying to change your mind. Please carry on.

    The Rodriguez post prompted mocking comments followed by insults traded back and forth. Folks, this is just investing, not politics and not religion.

    ***

    I agree with the general spirit of Montier's comments. That is, valuations are high across essentially all asset classes and thus prospective returns will be low. I don't think one should be dogmatic about when valuations are likely to fall (or how far they will fall). Montier seems unduly confident about a 7-year horizon to mean reversion.

    He points out, "The U.S. market is at its second or third most expensive point in history," and "Nothing in the precepts of being a value investor tells you about the path or the timing. It just tells you about the final destination."

    A study of history suggests that there will be large swings in valuation over time, and Montier states, "A sensible portfolio today has a sizable amount of dry powder: T-bills, bonds, TIPS [Treasury inflation-protected securities]. You have to say: “Look, I know cash is giving me a lousy return, but it has an option value (italics mine) that comes in when there are dislocations in markets.” Now, the risk of that strategy is clearly that this time is different and there is no more volatility."

    Personally, I think the risk of large negative equity market returns is much greater than the risk that volatility has disappeared forever.

    Some of the non-mocking comments following the Rodriguez interview asked what an investor might do if he/she was concerned about high valuations and their attendant risks. This Montier interview addresses that question, and GMO's preferred asset allocation is provided in the table embedded in the article.

    My portfolio is 25% equities, almost all foreign, but without the emerging market overweight suggested by GMO. It is about 16% LT US government bonds, about 10% intermediate-term, high-quality bonds, with the remainder in ST, high-quality bonds (and a small TIPS position).

    My portfolio is a poor choice for an investor who will go to sleep for the next 30 years and then wake up to spend the money. That investor should invest primarily in equities. I agree with Montier that, "It might be true (i.e., the S&P 500 might be cheap) only if you believed there was absolutely no mean reversion—in that case you’d be looking at a 3% real return from equities, zero from bonds, and, say, minus 1% or 2% from cash."

    If there was no mean reversion, I'd expect at least 3.25% real per annum from the S&P 500 (and more from foreign equities) with 0.98% (real) from 30-year TIPS, less from most other bonds.

    My current portfolio will earn less than that. However, it has an option value. The LT and intermediate-term government bonds are likely to rise if equities fall substantially, and the ST issues will hold their value. I'll have funds (dry powder) to buy equities at better valuations, assuming that day comes again. If not, I will suffer an opportunity cost.

    However, the opportunity cost (estimated prospectively) is low based on return estimates above.
    Erstwhile Dance Theatre of Dayton performer cum bellhop. Carried (many) bags for a lovely and gracious 59 yo Cyd Charisse. (RIP) Hosted epic company parties after Friday night rehearsals.

  • #2
    You are thinking bonds will rise in next recession? I am torn on this myself, concerned they will actually go down together next time from a US based perspective, but globally would still be seen as highest sovereign yield so could do well. So I profess to be unclear as mud, but fear bonds may not provide the best optionality.

    I dont think volatility is gone forever, it just goes in regimes and we are in a low vol one for now, which is a great time to be invested and using vehicles/structures that otherwise suffer from volatility.

    I like indices since theyre simple and effective, but dont believe in strong EMH. The phillip morris action on friday should break any strong emh belief from people, also the pendulum swinging so far to amzn fear giving great discounts on certain businesses, etc..though I still wont do single stocks as I am risky enough in other ventures that its simply unnecessary.

    Comment


    • #3


      You are thinking bonds will rise in next recession?
      Click to expand...


      Anything is possible. Maybe the 1970s will rise from the dead. In that case, my long- and intermediate-term bonds will fare poorly. Half the portfolio is in cash or near-cash though, so there will be plenty of dry powder.

      However, I expect deflation in the aftermath of the next recession. The price level tends to fall with a decline in economic activity, and the high, economy-wide debt levels today should exacerbate that trend. Also, when equities crater, investors tend to bid up safe bonds. We'll see when the next downturn arrives. (There will be another downturn, won't there?)
      Erstwhile Dance Theatre of Dayton performer cum bellhop. Carried (many) bags for a lovely and gracious 59 yo Cyd Charisse. (RIP) Hosted epic company parties after Friday night rehearsals.

      Comment


      • #4





        You are thinking bonds will rise in next recession? 
        Click to expand…


        Anything is possible. Maybe the 1970s will rise from the dead. In that case, my long- and intermediate-term bonds will fare poorly. Half the portfolio is in cash or near-cash though, so there will be plenty of dry powder.

        However, I expect deflation in the aftermath of the next recession. The price level tends to fall with a decline in economic activity, and the high, economy-wide debt levels today should exacerbate that trend. Also, when equities crater, investors tend to bid up safe bonds. We’ll see when the next downturn arrives. (There will be another downturn, won’t there?)
        Click to expand...


        I dont believe anyone has a real handle on inflation, and we are in a deflationary environment from so many angles its basically unavoidable. I think the 70s was unique and likely just monetary policy errors compounded by macro geopolitical issues.

        I read several portions of that and there were some serious sour grapes in there, I mean yes active investing has merit. But his description of passive comes from his conflict of interest viewpoint only. I mean if we knew ex ante and reliably that some manager could outperform we would all do it. However, it basically boils down to luck so passive is really just an acceptance of limitations in that regard, especially with respect to time and knowledge.

        "value" investors dont seem to have done well in the volatile regimes lately either. which may be a problem with everyone calling themselves value when in reality there are a million different varieties, most of which turn out to simply be value trap investors buying poor businesses in dying fields with high capex and complaining about it.

        That is not a stab at you CM, but those guys on twitter doing the above. Real issue is everyone wanting to be labeled a value investor so much so that its a worthless term lately. They call buffett one and he is obviously not and hasnt been for decades, and you still hear people talking about net-nets as if theyve existed in the last 50 years.

        Comment


        • #5





          You are thinking bonds will rise in next recession? 
          Click to expand…


          Anything is possible. Maybe the 1970s will rise from the dead. In that case, my long- and intermediate-term bonds will fare poorly. Half the portfolio is in cash or near-cash though, so there will be plenty of dry powder.

          However, I expect deflation in the aftermath of the next recession. The price level tends to fall with a decline in economic activity, and the high, economy-wide debt levels today should exacerbate that trend. Also, when equities crater, investors tend to bid up safe bonds. We’ll see when the next downturn arrives. (There will be another downturn, won’t there?)
          Click to expand...


          I do think cash is positioned to be a better option. Holding costs low as well.

          Comment


          • #6








            You are thinking bonds will rise in next recession? 
            Click to expand…


            Anything is possible. Maybe the 1970s will rise from the dead. In that case, my long- and intermediate-term bonds will fare poorly. Half the portfolio is in cash or near-cash though, so there will be plenty of dry powder.

            However, I expect deflation in the aftermath of the next recession. The price level tends to fall with a decline in economic activity, and the high, economy-wide debt levels today should exacerbate that trend. Also, when equities crater, investors tend to bid up safe bonds. We’ll see when the next downturn arrives. (There will be another downturn, won’t there?)
            Click to expand…


            I dont believe anyone has a real handle on inflation, and we are in a deflationary environment from so many angles its basically unavoidable. I think the 70s was unique and likely just monetary policy errors compounded by macro geopolitical issues.

            I read several portions of that and there were some serious sour grapes in there, I mean yes active investing has merit. But his description of passive comes from his conflict of interest viewpoint only. I mean if we knew ex ante and reliably that some manager could outperform we would all do it. However, it basically boils down to luck so passive is really just an acceptance of limitations in that regard, especially with respect to time and knowledge.

            “value” investors dont seem to have done well in the volatile regimes lately either. which may be a problem with everyone calling themselves value when in reality there are a million different varieties, most of which turn out to simply be value trap investors buying poor businesses in dying fields with high capex and complaining about it.

            That is not a stab at you CM, but those guys on twitter doing the above. Real issue is everyone wanting to be labeled a value investor so much so that its a worthless term lately. They call buffett one and he is obviously not and hasnt been for decades, and you still hear people talking about net-nets as if theyve existed in the last 50 years.
            Click to expand...


            Buffett is clearly a value investor.

            Value investing is not just buying cigar butts for one last puff (the original Graham method). It's estimating intrinsic value (e.g., through discounted cash flow model) and purchasing when the market price is less than intrinsic value. Value investors might buy companies growing rapidly (albeit less commonly because those are less often available at a discount to a conservative estimate of intrinsic value) just as they might invest in the debt of bankrupt companies.

            Value investors don't buy just because the price has been going up (momentum investors), or because lines on charts have attractive squiggles (technical speculators), or because a company brought a new defibrillator/stent/joint replacement to market (many physicians).
            Erstwhile Dance Theatre of Dayton performer cum bellhop. Carried (many) bags for a lovely and gracious 59 yo Cyd Charisse. (RIP) Hosted epic company parties after Friday night rehearsals.

            Comment


            • #7











              You are thinking bonds will rise in next recession? 
              Click to expand…


              Anything is possible. Maybe the 1970s will rise from the dead. In that case, my long- and intermediate-term bonds will fare poorly. Half the portfolio is in cash or near-cash though, so there will be plenty of dry powder.

              However, I expect deflation in the aftermath of the next recession. The price level tends to fall with a decline in economic activity, and the high, economy-wide debt levels today should exacerbate that trend. Also, when equities crater, investors tend to bid up safe bonds. We’ll see when the next downturn arrives. (There will be another downturn, won’t there?)
              Click to expand…


              I dont believe anyone has a real handle on inflation, and we are in a deflationary environment from so many angles its basically unavoidable. I think the 70s was unique and likely just monetary policy errors compounded by macro geopolitical issues.

              I read several portions of that and there were some serious sour grapes in there, I mean yes active investing has merit. But his description of passive comes from his conflict of interest viewpoint only. I mean if we knew ex ante and reliably that some manager could outperform we would all do it. However, it basically boils down to luck so passive is really just an acceptance of limitations in that regard, especially with respect to time and knowledge.

              “value” investors dont seem to have done well in the volatile regimes lately either. which may be a problem with everyone calling themselves value when in reality there are a million different varieties, most of which turn out to simply be value trap investors buying poor businesses in dying fields with high capex and complaining about it.

              That is not a stab at you CM, but those guys on twitter doing the above. Real issue is everyone wanting to be labeled a value investor so much so that its a worthless term lately. They call buffett one and he is obviously not and hasnt been for decades, and you still hear people talking about net-nets as if theyve existed in the last 50 years.
              Click to expand…


              Buffett is clearly a value investor.

              Value investing is not just buying cigar butts for one last puff (the original Graham method). It’s estimating intrinsic value (e.g., through discounted cash flow model) and purchasing when the market price is less than intrinsic value. Value investors might buy companies growing rapidly (albeit less commonly because those are less often available at a discount to a conservative estimate of intrinsic value) just as they might invest in the debt of bankrupt companies.

              Value investors don’t buy just because the price has been going up (momentum investors), or because lines on charts have attractive squiggles (technical speculators), or because a company brought a new defibrillator/stent/joint replacement to market (many physicians).
              Click to expand...


              I agree but people who like to call themselves value investors are very touchy about it all.

              Buffett does not seemed concerned about getting much of a discount now at all, I think he just sees on a longer time frame it doesnt matter as long as he's bought a superior business model, or one that will likely continue its dominance in market share towards a monopoly of sorts. He loves that stuff.

              I like the time angle myself (as Im a long time away from needing the funds), everything is a decent buy looking back from 30-50 years into the future. That doesnt work nearer to retirement obviously.

              Comment


              • #8
                This is an interesting discussion since I just finished Roth's "Great Depression: A Diary."  The major take-away, to me, from that book, is that it would be nice to have some cash when things are on sale.  Obviously, timing was an issue throughout the 1930's, and that hasn't changed.  (When to buy, when to sell--ultimately, from my understanding, people that were not leveraged and were able to hold on, did fine.  Somebody correct me if I'm wrong.)  His observations about real estate (you may not get any income but still need to cover taxes, mortgage) were something that I hadn't thought about; with our recent Great Recession and the high unemployment, I was able to find tenants.  I have also lived by the principle that doctors will always find work, we just might not be paid [much] for it; it raises the question of physician/hospital financial health if every patient were suddenly either medicaid/medicare or uninsured.

                Anyway, back to you, CM.  The magnitude of the opportunity cost is too much for me to have "dry powder" or try to pick value stocks.  I suspect I will have some cash flow during a pullback/recession, hopefully enough that I would not care what has happened to my portfolio.  I have a modest bond position just in case.  I have no plans for selling my equity indexes for decades.  I like the idea of a cash position or a big TIPS portfolio, but so far I just haven't had the discipline to keep (the majority) of my investing in anything other than equities.

                Comment


                • #9




                  This is an interesting discussion since I just finished Roth’s “Great Depression: A Diary.”  The major take-away, to me, from that book, is that it would be nice to have some cash when things are on sale.  Obviously, timing was an issue throughout the 1930’s, and that hasn’t changed.  (When to buy, when to sell–ultimately, from my understanding, people that were not leveraged and were able to hold on, did fine.  Somebody correct me if I’m wrong.)  His observations about real estate (you may not get any income but still need to cover taxes, mortgage) were something that I hadn’t thought about; with our recent Great Recession and the high unemployment, I was able to find tenants.  I have also lived by the principle that doctors will always find work, we just might not be paid [much] for it; it raises the question of physician/hospital financial health if every patient were suddenly either medicaid/medicare or uninsured.

                  Anyway, back to you, CM.  The magnitude of the opportunity cost is too much for me to have “dry powder” or try to pick value stocks.  I suspect I will have some cash flow during a pullback/recession, hopefully enough that I would not care what has happened to my portfolio.  I have a modest bond position just in case.  I have no plans for selling my equity indexes for decades.  I like the idea of a cash position or a big TIPS portfolio, but so far I just haven’t had the discipline to keep (the majority) of my investing in anything other than equities.
                  Click to expand...


                  I don't expect another depression but Roth and his contemporaries didn't expect one either, so I always ask myself if I would be comfortable with my asset allocation if I lived through something comparable to 1929-1949 here or 1989-present in Japan. With my current allocation the answer is a definite, "Yes."

                  I might have the same answer at 60/40 stocks/bonds if I was 30 yo, but sadly, I'm not.

                  Also, as long as you intend to work, I think you'll be fine as a physician. I may keep working for a long time (depending on future night and weekend call responsibilities), but I want the option to retire to a comfortable and care-free existence in the near future. For me, that means the ability to withdraw 150% of my current living expenses from my portfolio with no more than a 3.5% SWR--with a social security cushion to arrive at age 70.

                  I estimate that I'll be there around May of 2020 if I earn a zero percent after-tax real return. That's a short-term horizon, and stocks could be down 50% by then. I'd take that risk if the PE10 was 10, but not when it is about 30.

                   
                  Erstwhile Dance Theatre of Dayton performer cum bellhop. Carried (many) bags for a lovely and gracious 59 yo Cyd Charisse. (RIP) Hosted epic company parties after Friday night rehearsals.

                  Comment


                  • #10







                    This is an interesting discussion since I just finished Roth’s “Great Depression: A Diary.”  The major take-away, to me, from that book, is that it would be nice to have some cash when things are on sale.  Obviously, timing was an issue throughout the 1930’s, and that hasn’t changed.  (When to buy, when to sell–ultimately, from my understanding, people that were not leveraged and were able to hold on, did fine.  Somebody correct me if I’m wrong.)  His observations about real estate (you may not get any income but still need to cover taxes, mortgage) were something that I hadn’t thought about; with our recent Great Recession and the high unemployment, I was able to find tenants.  I have also lived by the principle that doctors will always find work, we just might not be paid [much] for it; it raises the question of physician/hospital financial health if every patient were suddenly either medicaid/medicare or uninsured.

                    Anyway, back to you, CM.  The magnitude of the opportunity cost is too much for me to have “dry powder” or try to pick value stocks.  I suspect I will have some cash flow during a pullback/recession, hopefully enough that I would not care what has happened to my portfolio.  I have a modest bond position just in case.  I have no plans for selling my equity indexes for decades.  I like the idea of a cash position or a big TIPS portfolio, but so far I just haven’t had the discipline to keep (the majority) of my investing in anything other than equities.
                    Click to expand…


                    I don’t expect another depression but Roth and his contemporaries didn’t expect one either, so I always ask myself if I would be comfortable with my asset allocation if I lived through something comparable to 1929-1949 here or 1989-present in Japan. With my current allocation the answer is a definite, “Yes.”

                    I might have the same answer at 60/40 stocks/bonds if I was 30 yo, but sadly, I’m not.

                    Also, as long as you intend to work, I think you’ll be fine as a physician. I may keep working for a long time (depending on future night and weekend call responsibilities), but I want the option to retire to a comfortable and care-free existence in the near future. For me, that means the ability to withdraw 150% of my current living expenses from my portfolio with no more than a 3.5% SWR–with a social security cushion to arrive at age 70.

                    I estimate that I’ll be there around May of 2020 if I earn a zero percent after-tax real return. That’s a short-term horizon, and stocks could be down 50% by then. I’d take that risk if the PE10 was 10, but not when it is about 30.

                     
                    Click to expand...


                    Well, you touch upon one of my concerns there.  As the whole "FIRE" concept seems to have become mainstream in the last decade, it will be interesting to see how the community responds to another big pullback.  Specifically, 1) Will people still want to retire--I couldn't work enough in 2009, because I wanted more cash to shovel into the market (e.g. WFC for $9?!) 2) How do all those multi-decade plans for SWRs work when the portfolio gets cut in half--again, in 2009, many mid-career docs who had been talking about retirement quickly changed their tunes.  Like you mention, if you're young, you just keep working....

                    I think it is tough to get to a care-free existence without taking risks, even something as pedestrian as equity indexes.  Particularly when you start accumulating late and also have to deal with a bunch of debt.

                    Comment


                    • #11
                      G - That is exactly what I've been wondering lately. I don't understand how the 25x annual spending rule will work if the stock market tanks by 40% or more again. Wouldnt it be really harmful to a FIRE's portfolio if you had to sell equities to pay your bills during a big downturn? Or would most go back to work?
                      I too think I would want to work a lot during a stock sale. I do hope to be debt free during the next downturn as well which will help with buying as much as possible. If I'm lucky we'll also be living in a smaller house with no mortgage and have our spending down to a minimum. Fingers crossed.

                      Comment


                      • #12
                        I have lived through 2 dramatic stock declines.  2000 and 2008.  These declines are scary when you are in the middle of them. I was thinking of retiring in 2000.  I am very glad I kept my job. I worry about those who want to retire extremely early.  Hightower the 4% rule worked for the Great Depression and 70s stagflation.  Not sure about inflation at the level of the Weimar Republic or Japanese long term deflation.  These extremes I think are not plan worthy.

                        Comment


                        • #13




                          I have lived through 2 dramatic stock declines.  2000 and 2008.  These declines are scary when you are in the middle of them. I was thinking of retiring in 2000.  I am very glad I kept my job. I worry about those who want to retire extremely early.  Hightower the 4% rule worked for the Great Depression and 70s stagflation.  Not sure about inflation at the level of the Weimar Republic or Japanese long term deflation.  These extremes I think are not plan worthy.
                          Click to expand...


                          The 4% rule actually failed because of the 1970s stagflation. Bengen published his work describing the 4% safe withdrawal rate in 1994, so he didn't have 30 year periods following the high valuations of the mid-60s.

                          This more recent paper showed a 4.7% failure rate for the 4% rule in the US between 1900-2014, Refining the Failure Rate, by Javier Estrada: https://poseidon01.ssrn.com/delivery.php?ID=7470950950080010120830750100950000 96054007008081088020025122006023009113095070124006 03806302201404904000500501100501206510301802301506 90180030310910040150000650570210050090190051271260 89007019004078025069103090007109023116097097076025 001119113112&EXT=pdf. (See exhibit 2, on page 8.)

                          I've read elsewhere that failures occurred after 1965 and 1966.

                          Exhibit 2 in the paper above shows that a 4% withdrawal rate was not "safe" in any of the 21 developed nations studied between 1900 and 2014. A 3% SWR was "safe" in only 7, including the US.

                          I will bet a dollar that 2000 will eventually prove to be another failure. Good move to stay employed then.  
                          Erstwhile Dance Theatre of Dayton performer cum bellhop. Carried (many) bags for a lovely and gracious 59 yo Cyd Charisse. (RIP) Hosted epic company parties after Friday night rehearsals.

                          Comment


                          • #14
                            I copy/pasted Exhibit 2 from the Estrada study below (for the majority of readers who won't go to the original article   ). The formatting doesn't transfer, so it's inconvenient to review here, but one can still read it with a little effort.

                             

                            Exhibit 2: The Failure Rate and Two Refinements
                            This exhibit shows, for the annually‐rebalanced 60‐40 stock‐bond allocation, and for the 21 countries and the world
                            market in the sample, the failure rate (F), shortfall years (SY), and sustained percentage (SP) as defined in expressions
                            (1)‐(3) in the text, over 86 rolling 30‐year retirement periods, beginning with 1900‐29 and ending with 1985‐2014.
                            The starting capital is $1,000, the initial withdrawal rates (IWR) are 4% in panel A and 3% in panel B, and subsequent
                            annual withdrawals are adjusted by inflation. The data is described in Exhibit A1 in the appendix. All figures in %,
                            except for SY (in years).
                            Panel A: 4% IWR Panel B: 3% IWR
                            Country F SY SP Country F SY SP
                            Canada 1.2 2.0 93.3 Canada 0.0 N/A N/A
                            New Zealand 3.5 2.7 91.1 Denmark 0.0 N/A N/A
                            Denmark 4.7 1.8 94.2 Netherlands 0.0 N/A N/A
                            USA 4.7 3.0 90.0 New Zealand 0.0 N/A N/A
                            South Africa 5.8 3.2 89.3 South Africa 0.0 N/A N/A
                            Australia 12.8 5.7 80.9 UK 0.0 N/A N/A
                            Sweden 16.3 7.3 75.7 USA 0.0 N/A N/A
                            UK 22.1 7.1 76.5 Australia 1.2 3.0 90.0
                            Netherlands 23.3 4.7 84.3 Sweden 2.3 1.0 96.7
                            World 23.3 8.4 72.2 Switzerland 3.5 2.0 93.3
                            Switzerland 25.6 8.5 71.7 World 3.5 2.0 93.3
                            Ireland 36.0 8.5 71.5 Norway 9.3 4.6 84.6
                            Japan 36.0 13.4 55.4 Ireland 14.0 4.0 86.7
                            Portugal 36.0 9.6 68.0 Portugal 20.9 8.2 72.6
                            Finland 38.4 14.8 50.7 Spain 22.1 6.9 77.0
                            Spain 43.0 9.7 67.7 Belgium 29.1 10.0 66.5
                            Austria 44.2 16.2 46.0 Japan 30.2 15.0 50.0
                            Norway 50.0 6.9 76.9 Austria 33.7 15.2 49.4
                            Belgium 53.5 10.5 64.9 Finland 33.7 11.6 61.3
                            Germany 53.5 15.2 49.3 France 37.2 10.2 66.0
                            France 58.1 11.4 62.1 Germany 44.2 15.1 49.6
                            Italy 70.9 12.1 59.6 Italy 53.5 9.6 67.9
                            Erstwhile Dance Theatre of Dayton performer cum bellhop. Carried (many) bags for a lovely and gracious 59 yo Cyd Charisse. (RIP) Hosted epic company parties after Friday night rehearsals.

                            Comment


                            • #15







                              I have lived through 2 dramatic stock declines.  2000 and 2008.  These declines are scary when you are in the middle of them. I was thinking of retiring in 2000.  I am very glad I kept my job. I worry about those who want to retire extremely early.  Hightower the 4% rule worked for the Great Depression and 70s stagflation.  Not sure about inflation at the level of the Weimar Republic or Japanese long term deflation.  These extremes I think are not plan worthy.
                              Click to expand…


                              The 4% rule actually failed because of the 1970s stagflation. Bengen published his work describing the 4% safe withdrawal rate in 1994, so he didn’t have 30 year periods following the high valuations of the mid-60s.

                              This more recent paper showed a 4.7% failure rate for the 4% rule in the US between 1900-2014, Refining the Failure Rate, by Javier Estrada: https://poseidon01.ssrn.com/delivery.php?ID=7470950950080010120830750100950000 96054007008081088020025122006023009113095070124006 03806302201404904000500501100501206510301802301506 90180030310910040150000650570210050090190051271260 89007019004078025069103090007109023116097097076025 001119113112&EXT=pdf. (See exhibit 2, on page 8.)

                              I’ve read elsewhere that failures occurred after 1965 and 1966.

                              Exhibit 2 in the paper above shows that a 4% withdrawal rate was not “safe” in any of the 21 developed nations studied between 1900 and 2014. A 3% SWR was “safe” in only 7, including the US.

                              I will bet a dollar that 2000 will eventually prove to be another failure. Good move to stay employed then.  ????
                              Click to expand...


                              Agree that the 2000 period is already 2/3rds on its way to becoming one of the top 2 worst 30 year rolling periods in history.

                              Comment

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