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Thanks again for the link. I have found that William Bernstein does not always tie up all of his loose ends at one location. But he seems to provide enough instructions for you to figure out. Kinda like assembling Christmas toys. I think it hard to say everything in a short interview and you can't ...

Try this: http://groups.msn.com/Investor/general.msnw?action=get_message&mview=1&ID_Message=176&all_topics=0 You just can't get a 3% inflation adjusted withdrawal from a 3% real return portfolio which WB knows. I think he tends to be a little loose in quotes and predictions with the medi...

as you can tolerate the S&P500 tracking error which I can do just fine.

I am sure your positive tracking error over the last few years hasn't been too painful

I think prometheuss had a good point: Technically, Bernstein is not describing a SWR. He is describing returns after inflation and using the 3% in a manner that does not draw any funds from retirement investments--just from the return on those investments. Bernstein doesn't actually mention inflatio...

Please ask Bob what he will do if the DOW ends up at 12,000 at the end of this year and a friend asks whether it is safe to retire on Jan. 1, 2004 with a plan calling for a 4 percent withdrawal. Bob is optimistic and a dow of 12,000 sounds about right to him. He would not be at all surprised to see...

I guess I would go with the 50-75% range if constrained to use only us equities/one class of fixed income Fortunately there are other allocation choices

What is your answer to that person's question?.

Historical analysis has limitations and "may sometimes be misleading" (or whatever Bernstein said. ) 2000 may have been one of those times.

You forgot to add 'optimal' only if you use a particular narrow definition. An effectively equivalent (or superior in some ways) definition provides an optimal stock allocation of 50%. True, I guess I am responding to what hocus says intercst's claim is. I think any specific claim of optimal alloca...

Bob understands that valuation is an issue and he is sad that he can know the maximal withdrawal rate for a given period only in retrospect. OTOH Bob sees a relatively bright future and thinks that the 4% "100% swr" will work for the future. Bob would not take more than 4% even if he felt ...

The claim that I keep hitting intercst on is the one that it will take longer to retire safely if you go with an allocation other than 74 percent stocks. He is dogmatic on that point. Is he wrong to be so? I would say that anyone who claims to know the optimal future allocation is wrong. We could j...

hocus I am willing to post a question for him there but I am wondering about this 74% optimal stock allocation issue. If we accept that he calculated it right for 12/31 retirement starts then 74% might well have been the best allocation over the 1870-2002 period. Did he actually claim that he was su...

There is no possible way that a mere rule of thumb could tell you which allocation would get you to a safe retirement the quickest. You could only figure that out by doing a valid analysis of the data that bears on the question. The OED2 defines "rule of thumb" thusly: "A method or p...

swr rule of thumb 94%
one correct swr 6%

with 50 responding excluding maybe/undecided answers

this was more dramatic than I anticipated

then again; everybody would get one and efficient market theory then simply takes even THAT advantage away

a possibility I hadn't considered

I find his stubborn refusal to consider the effects of valuation to be so extreme that I would say he is wrong. a couple of days ago I was objecting to hocus saying that it was a matter of "athematical certitude" that 4% was not safe I guess he has given up on that part :)

That might just get him arrested.

I hoped that someone would notice my little attempt at humor

ok, I can live with that. I thought you were quite concerned with defintions. The definition that I have been putting forward for some time is that the SWR provides a data-based assessment of the probabilities of various future investment possibilities. There's great value in performing such an asse...

Different methodologies will produce different best estimates. If a methodology suffers from a serious logical flaw, then it's result should be discarded as incorrect Historical swr analysis will fail when long term future returns are lower than the past. Believing this I agree with hocus and inter...

JWR1945 posted a SWR definition in post 6859 in the Great SWR investigation Part 2 thread. The thread has moved onto other issues related to swr. I am not sure that JWR1945 is ready but I am so here is a poll, WRT to the definition of swr in the post.