Liability-Matching Portfolio?

[Kevin K.]

Since Harry Browne specifically recommended using the PP for "money you can't afford to lose" one could argue that it was an early version of what William Bernstein and many others call a liability-matching portfolio (LMP), except of course that it's really a probabalistic portfolio.

Pre-2022 using a TIPS ladder for LMP purposes made no sense because TIPS real returns were negative, but with the sharp spike in interest rates since then it has been (and remains) possible to construct a 30 year TIPS ladder with an inflation-adjusted SWR well above 4%. As a retiree I've often thought about going that route but have found plenty of reasons not to:

1. According to Portfolio Charts the historic SWR for the P.P. is 5.4% (6.0% for the GB).
2. Putting all (or most) of your nest egg in TIPS means trusting one entity (the U.S. Government) for your economic survival.
3. No flexibility: you have to hold the bonds to maturity no matter what, meaning if that unexpected expenses necessitate selling all or part of the ladder you may have to take a major haircut if interest rates have spiked over a multi-decade holding period.

Still even with those negatives (and others) it's hard not to be impressed with a formula of 60-70% TIPS with the rest in equities:

https://www.morningstar.com/columns/rek ... est-friend

Since the PP and its variants seem to draw the same kind of risk-averse folks as TIPS I'm curious about whether any PP'ers are using them in their VP.

[boglerdude]

Browne was libertarian. We went apeshit in 2020 and he'd have lost (more) faith in authority.

1.2% fixed on iBonds while M2 has been 7%. iBonds should be giving a healthy return over inflation because they're for the little guy. Well its consolation watching countries like Canada vote for more socialism. US still the cleanest dirty shirt

edit1 for substance: Vanguard - No More SpecID for Limit Orders https://www.bogleheads.org/forum/viewtopic.php?t=447407