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Am I doing this correctly?
Old 11-16-2013, 03:33 PM   #1
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Am I doing this correctly?

I've entered my total portfolio, and I add the expected social security and then under "Your Portfolio" under "Total Market" I change the 75% in the "equities" box to 20%. Would that be the best option for someone who wants to get the most conservative results?

Or would I go into another option under portfolio and put a flat percentage of interest expected?

I want to get the most conservative results, as I will probably keep a large portion in safe/guaranteed investments and maybe a third in the market in bond/stock index funds.

Can someone assist me?


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Old 11-16-2013, 07:01 PM   #2
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If you are going to be sticking most of it in CD's I'd put in what ever percentage you have in stocks say 20%. Then change the fixed income portion form long interest rates to 5 Year Treasury notes. Currently 5 year T-bills are yielding about 1.36% or about the same as you get in a 3 to 5 year CD.

Be warned that your spending will be reduced by about 15% from a more conventional approach

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Old 11-17-2013, 09:50 AM   #3
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Originally Posted by Debinnov a View Post
So the more conventional approach would be more like 20% cash, 20% equities and the rest bonds or bond funds? I apologize, I am just trying to sort all of this out.
I'm not sure how to define the conventional approach, but I can tell you FIRECalc (ie, history) says you'll hurt the chances of your portfolio lasting 30 years if you have less than 35% or so in equities.

This chart shows FIRECalc 30 year survival rates for equity allocations. 20% in equities results in survival rates of only 70% or so, while 35% or more moves that survival number to 90% or more.

Having too low an equity allocation increases risk, it doesn't decrease it.
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Numbers is hard

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Old 11-17-2013, 09:57 AM   #4
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That makes sense! Thanks
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