I recently came across the following:
It's not just short-term returns you have to worry about. The Leuthold Group studied the historical performance of bonds and found that there is a simple rule of thumb: Whatever the yield on 10-year Treasuries currently is, that's about the annual total return you can expect from bonds over the next decade. Today that yield is a historically low 2.8%.
Do you think that rule of thumb has proven true in your own experience? Can I still use a 4 percent safe withdrawal rate if I expect that bonds will only be returning 2.8% and 30% of my investment portfolio is bonds?
It's not just short-term returns you have to worry about. The Leuthold Group studied the historical performance of bonds and found that there is a simple rule of thumb: Whatever the yield on 10-year Treasuries currently is, that's about the annual total return you can expect from bonds over the next decade. Today that yield is a historically low 2.8%.
Do you think that rule of thumb has proven true in your own experience? Can I still use a 4 percent safe withdrawal rate if I expect that bonds will only be returning 2.8% and 30% of my investment portfolio is bonds?