When I have run FIRECalc, I have always used the Commercial Paper selection for the fixed income side of it. I now find that I didn't really understand what "Commercial Paper" really meant.
Here is a top-level definition:
Then click on the "Related Link" on that page, then on "Commercial Paper", or just click this link below to get the detail:
I realize that FIRECalc can only use historical data that has existed over time.
Nonetheless, I wonder about the SWR effects of an intermediate bond fund vs. the commercial paper allocation selection.
If I understand correctly, the commercial paper is very unlikely to ever have a negative annual return, but will probably not have a strong positive return, either.
OTOH, an intermediate bond fund may have a negative return year here and there, but will probably have much stronger positive returns than the commercial paper.
So the net effect of an intermediate bond fund, instead of commercial paper, would be to increase the SWR somewhat?
Does this make any sense? Am I missing something? Please tell!