mathjak107
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jul 27, 2005
- Messages
- 6,208
dr wade pfau and david blanchett look at which is more accurate , using rolling actual time frames like firecalc or monte carlo simulations to determine allocations. interesting enough they feel the actual data when used is flawed becuause of to many overlapping time frames influenced by the same dates appearing multiple times skewing results ..
"The 4% rule did not fail in the historical period for stock allocations between 40% and 70%. More bond-heavy portfolios experienced much lower success rates, though, with a bonds-only portfolio succeeding just in 41% of the historical simulations. With Monte Carlo simulations based on the same historical data, retirees would be encouraged to hold some stocks, as success rates of over 90% are possible with stock allocations of only 20%. The highest success rates occurred in the range between 30% and 50% stocks."
Advisor Perspectives
"The 4% rule did not fail in the historical period for stock allocations between 40% and 70%. More bond-heavy portfolios experienced much lower success rates, though, with a bonds-only portfolio succeeding just in 41% of the historical simulations. With Monte Carlo simulations based on the same historical data, retirees would be encouraged to hold some stocks, as success rates of over 90% are possible with stock allocations of only 20%. The highest success rates occurred in the range between 30% and 50% stocks."
Advisor Perspectives
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