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- Jun 25, 2005
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Some of you are fans of Milevsky, so here's a link to a paper by him and colleagues in the J. of Financial Planning: Retirement Income Sustainability: How to Measure the Tail of a Black Swan
These links are usually good for only a month.
These links are usually good for only a month.
They propose a SORDEX ratio which is based on two runs of a retirement sustainability software (I guess such as FIREcalc). One run of your current situation and another run with a hypothetical situation of you 3 years later after your portfolio has been hit with a 1-in-100 black swan event.This paper describes a new methodology for measuring the overall risk embedded within a retirement income plan, motivated by the existence of "black swans," an idea introduced by Nassim Taleb in his best-selling book The Black Swan: The Impact of the Highly Improbable.