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Your Portfolio dramatic differences
Old 03-25-2017, 03:50 PM   #1
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Your Portfolio dramatic differences

Why such a dramatic difference between Total Market and Mixed Portfolio on the Your Portfolio tab??
Under Total Market I check Commercial Paper and 80% Equity which results in 63% success.
With Mixed Portfolio I select 80% S&P and 20% LT Corp Bond and get 100%.

All other criteria is the same.
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Old 03-26-2017, 10:32 AM   #2
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I believe Total Market is based on a broader data than just the S&P 500. Try the following under mixed and it should be much closer to the total market tab:

US Small: 20%
S&P 500: 60%
LT Corp: 20%

The mixed portfolio is a little lacking in that it does not include options/data for mid-cap stocks, though that may be covered by US Small depending on how "small" is defined in the dataset.

This discussion on bogleheads provides some data on the composition of the total stock market: https://www.bogleheads.org/wiki/Appr...l_stock_market

Large cap is about 72% and mid/small together are the other 28% in the referenced index funds.
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Old 03-26-2017, 06:32 PM   #3
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Thanks Grant - I ran your suggestions and it still resulted in a significant gap between success rates.
Normally I just stick with the worse result to be more conservative, but this was SO much different, I just wanted to understand it abit better.
Its a mystery
Gracias.
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Old 03-26-2017, 06:52 PM   #4
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I'm surprised there is such a difference as well. I didn't try duplicating your results, so I'm assuming they are accurate.

Could commercial paper vs LT Corp Bond be a part of the delta?

Also, it hard to know the difference based on success rates. Theoretically (and probably pretty much in reality too), there could be a bunch of years with similar 'on the edge of failing' outcomes, so a small change in performance results in a large change in binary success/failure measure.

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Old 03-26-2017, 06:59 PM   #5
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From Firecalc:

The long interest rate (default) is probably closer to typical fixed income investments than commercial paper, which is less stable and not often used as an investment by individuals. Five and 30 year Treasuries are offered for additional research.
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Old 03-26-2017, 07:16 PM   #6
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OK, I just ran them with all other being defaults, and I got the opposite trend:

Under Total Market I check Commercial Paper and 80% Equity which results in - 95.7%

With Mixed Portfolio I select 80% S&P and 20% LT Corp Bond and get - 89.8%

versus your
Quote:
Under Total Market I check Commercial Paper and 80% Equity which results in 63% success.
With Mixed Portfolio I select 80% S&P and 20% LT Corp Bond and get 100%.
Either an entry error by one of us, or maybe the timing of your withdrawals with pensions or other add/subtracts?

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Old 04-02-2017, 07:23 AM   #7
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I may have stumbled across another variance between the two. Mixed portfolio is "(based on performance since 1927)." So if you have the default 1871 on total market, you are comparing apples to oranges in terms of percent success (116 versus 49 possible 30 year periods).

It does not make very much difference in the default FIRECalc settings, but your model may be different.
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