Am am confused at the volatility of Schiller's daily PE/10 ratio
. I read a good article about it a few years ago that talked about using it to ballpark the effect of current valuations on SWR. I can't find the article but the gist of it was that you divide 1 by PE/10 to get the SWR. The article recommended using .83 by PE/10 for a more conservative estimate. I do not use this approach for my own withdrawals
(I am way under the rates predicted by this method) but I do keep a line in my spreadsheet for .83/PE10 x portfolio to maintain a data point tracking the predicted number. I last updated it before the recent slump and it was 20.5 or something. Today I updated it and it was 15.25. 1/15.25 = 6.5%. .83/15.25 = 5.4%. .83/20.5 (a few months ago) = 4%. These numbers seem to jump around too much to have value. The idea of PE/10 is to smooth things out by averaging in a ten year period. It just doesn't seem like the last month should have effected it by 20-25% as would be indicated by these numbers.
Any one else track this data? Does anyone know the URL for my missing article so I can re-read and see what I am missing?