Square One

Research on Safe Withdrawal Rates

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hocus2004
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Square One

Post by hocus2004 »

Here's a link to a post that was put to the Motley Fool board by LivAboard on November 20, 2002. This post received 34 recommendations.

http://boards.fool.com/Message.asp?mid=18179867

LivAboard: "Hocus, why don't you post your retirement ideas again for those who weren't around when you did the first time, and for those of us with just a vague memory of what it was you were trying to discuss that is now clouded with months of discussing whether or not you were allowed to discuss it?"

Here is a link to my response, also dated November 20, 2002. This one received 33 recommendations.

http://boards.fool.com/Message.asp?mid=18180934

hocus: "Some portion of your investment portfolio needs to be absolutely safe, but not all of it. For example, I don't want to take any chances with the money used to finance the grocery or heating bills. But I am not so worried about the portion of my portfolio that supports my annual beach vacation.

"So I believe it is a good thing to know the safe withdrawal rate for various asset classes. I don't always go with the asset class that provides 100 percent safety, because those tend to be asset classes with low long-term growth potential. But I need to know the safe withdrawal rate for the various classes to make effective comparisons between them.

"Stocks, because of their volatility, have a low safe withdrawal rate. There is no one number- it varies from time to time and from circumstance to circumstance. But the number today appears to be something around 2 percent. That doesn't mean I don't like stocks. I love stocks. I just can't afford to put 80 percent of my money in an investment class with a 2 percent safe withdrawal rate.

"My goal is to determine the mix of assets that provides a reasonable overall withdrawal rate (in my case 4 percent) combined with the highest possible potential for long-term growth. For most investors, my expectation is that would be something near a 50 percent stock allocation "
unclemick
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Post by unclemick »

Gee - I started 50/50 after reading Ben Graham's fourth ed. in the early 70's and our balanced index funds SEC yield is down to the 2-3% range. ? Back to the future???

Heh heh - DeGaul and the Norwegian widow ride on. Hurry up and do nothing. Watching grass grow and paint dry is frenetic activity compared to our main ER portfolios. And of course I trade wildly in my hobby stocks - if one hasn't doubled in 7-10 yrs with DRIP divs. reinvested - I dump it.
hocus2004
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Post by hocus2004 »

Here are links to three constructive posts put forward by community members in the thread started by LivAboard referenced above.

1) http://boards.fool.com/Message.asp?mid=18181143

2828: "have you thought of stocks with good dividend yields? Mo is yielding close to 7%."￾

2) http://boards.fool.com/Message.asp?mid=18184926

SlowProcess: "One thing I've noticed about investing, it's what you miss that costs you money."￾

3) http://boards.fool.com/Message.asp?mid=18187366

BenSolar: "The results are neither dramatic or conclusive, but they do exist and they provide some support for Schiller's findings that Price/long term average Earnings is predictive of long term stock market results."￾
MacDuff
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Post by MacDuff »

hocus2004 wrote:Here are links to three constructive posts put forward by community members in the thread started by LivAboard referenced above.
I have been avidly reading this Research section, and find it very helpful.

But doesn't it kind of defeat the no-fee aspect of NoFeeBoards to link to posts that require a subscription to view?

Perhaps you could summarize, or just pass on those particular ideas?

mac
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ElSupremo
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Post by ElSupremo »

Greetings MacDuff :)
But doesn't it kind of defeat the no-fee aspect of NoFeeBoards to link to posts that require a subscription to view?
Perhaps you could summarize, or just pass on those particular ideas?
It would be great if we could get summaries from the pay to play sites instead of links. I just skip over stuff when referenced to pay sites. It does get a bit frustrating at times.
"The best things in life are FREE!"

www.nofeeboards.com
hocus2004
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Post by hocus2004 »

"Perhaps you could summarize...."

I'll make an effort either to provide a summary or a snippet of text when linking to a post on a pay-for site.
JWR1945
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Post by JWR1945 »

But doesn't it kind of defeat the no-fee aspect of NoFeeBoards to link to posts that require a subscription to view?
Perhaps you could summarize, or just pass on those particular ideas?
You are not the only ones, MacDuff and ES.

I decided not to renew my membership at the Fool. It wasn't a matter of fees. It was a matter of content.

Have fun.

John R.
hocus2004
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Post by hocus2004 »

"I decided not to renew my membership at the Fool. It wasn't a matter of fees. It was a matter of content."

This proves it, folks. JWR1945 and I are NOT the same person posting under different screen-names.

I paid a guy who knows how to write code $1,000 to write me a program allowing me to make personal copies of all the posts at the REHP board and a few other Motley Fool boards.

Do I favor the current board administration policies? Obviously not.

Do I enjoy the learning experience made available to me by me paying $30 to Motley Fool, regardless of all the nonsense gibberish I expose myself to by doing so? You betcha.

I would pay ten times $30 to gain access to the Golden Era REHP board posts. Others are of course within their rights to see things from a different perspective. But that's my take.

Junk posts don't hurt you. They blow away in the wind 15 minutes after they appear on the computer screen. It's the good stuff that matters. There is a whole heap of real good stuff in the Post Archives of the REHP board available for a very low price for those with a serious interest in learning what it takes to retire early.

Some of the gold has intercst's name on it. That's part of the story. I'll be putting up a post here someday where I identify "the best of intercst." It will be a long post. Looking only at the good stuff he did, it is fair to refer to him as a Giant of the movement. I point that out just so that no one gets any funny ideas re my position on the intercst question.
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