I don’t know about that. If you think in terms of the 4% rule, which is similar to how FireCalc views the world, there is an implied asset mix (asset allocation). Of course taking profits seems reasonable given that we’ve had a great market. However, also implied in the models is that there are good years and bad years. If you take profits, aren’t you eventually going to hinder the performance of your portfolio? Looked at it another way, I’m not sure where these profits go when you take them, but are you going to put them back in the years the market goes sour?
I think this “taking profits” concept is understandable in that I understand the feeling, but I think it has the potential to cause problems down the road. Taking the profit means you’re either spending more in the good years or it means you’re adjusting your AA. If you’re just essentially rebalancing, probably not too risky. If I recall, the 4% rule was successful with a pretty wide range of an Equity percentage in the AA. If you’re spending more, I think that could be risky.