obryanjf
Recycles dryer sheets
I'll buy the argument (by Dory I believe) that a simulator based on constant purchasing power versus variable purchasing power is an apples and oranges comparision.
One of my issues with a variable purchasing power calc is I think you need to redefine failure. I coded his system (roughly) and some of the NPV's of the draws as they got adjusted down were 30%, 20% etc. of the inititial draw. Even though the portfolio never technically failed, it does not smell like success to me. I use 50% of initial draw as a failure, in my other simulators.
I like the idea of a couple of simple automatic adjustments (+ or -) after ER rather than a fixed 4%, but have yet to find the right rules. Some adjustments would be closer to mimic what I would want to do if things (portfolio) crashed.
BTW Guyton 6% Inflation Rule rule was eliminated in one of his follow on's in the paper, but I can't find it right now with kids hollowering and jumping around.
job
One of my issues with a variable purchasing power calc is I think you need to redefine failure. I coded his system (roughly) and some of the NPV's of the draws as they got adjusted down were 30%, 20% etc. of the inititial draw. Even though the portfolio never technically failed, it does not smell like success to me. I use 50% of initial draw as a failure, in my other simulators.
I like the idea of a couple of simple automatic adjustments (+ or -) after ER rather than a fixed 4%, but have yet to find the right rules. Some adjustments would be closer to mimic what I would want to do if things (portfolio) crashed.
BTW Guyton 6% Inflation Rule rule was eliminated in one of his follow on's in the paper, but I can't find it right now with kids hollowering and jumping around.
job