donheff
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
There is nothing new to us in this article but I like how the author talks about those 98% success rates in monte carlo calculators, Firecalc, etc. The financial industry is alarmed with the data showing that black swan events are more likely in the real fat tail world than in the normally distributed simulators. But the author points out that a surprise 10 or 20% drop in our portfolio doesn't cause disaster it simply means we need to change course. A 2% (or greater) likelihood of a black swan doesn't really change anything now for investors like us who are not leveraged. It just means we are more likely to have to change course to get back on track than the simulator predicted. The important thing is to look at the possible scenarios that may unfold and have a plan for when and how you would change course to adapt. Of course, none of this alters the move toward more conservative initial SWR rates for those of us who worry that growth rates over the next couple of decades are likely to be low. Starting out a little safer is part of "the plan."