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Old 07-11-2006, 02:48 PM   #1
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Join Date: May 2006
Location: west coast, hi there!
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Comments on new FIRECalc

I really like the new FIRECalc version!* *The availability of a spreadsheet is great.* *It would be nice to add TIPS and intermediate term bonds as asset classes in the "mixed portfolio".* From my understanding of fixed income, intermediate term (2 - 3 yrs) have done better then LT bonds.* *The TIPS (this covers Ibonds too) option should be easy since it is just a fixed real rate number.* For intermediate bonds I would settle for the 5yr Treasury since FIRECalc already has this though not in the "mixed portfolio" option.

I also have an observation to share.* To get an idea of just how some asset classes were working I ran the following on advanced FIRECalc:
* no withdrawals
* mixed portfolio of 100% 1 month Treasury
* plan end = 20 years
* start portfolio value = 100000
The result shows that in 1929 it starts out at 104700 and by 1932 it became 145119.* *Yikes, didn't appreciate that the deflation was that bad but I checked the CPI numbers and indeed this looks roughly correct.* Perhaps this is a good argument for being flexible in your TIPS holdings (see Swedroe's bond book, Appendix B) i.e. be willing to sell your TIPS when rates decline sufficiently.

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