clifp
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Oct 27, 2006
- Messages
- 7,733
For me it's the simple fact that I have a very low return bogie to hit . . . my WR. If an asset is up 100%, as many were over the past two years, I can lock in many, many years of withdrawals without needing to take any additional risk. It becomes a pretty simple sell decision when your investment objective isn't to maximize returns, but simply to beat a fairly low hurdle rate.
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Interesting philosophy and probably completely consistent with a total return investing.
As income investors this bothers me a bit. So for example if my desired WR is 3.5% but my actual income from my portfolio is only 2.8% due to primarily to horrible cash returns. One way of looking at my spending is that is 20% higher than my income (almost as bad as Uncle Sam).
The other way is saying I'm only dipping into my principal by .7% and even after 30 years it is only 20-25% decline not a big deal.
Of course if 2.125% TIPs coupon covers your withdrawal needs than you must have a lot of assets or nice pensions.