Gyroscopic Investing

i would disagree on the trinity study basing it on stock heavy portfolios's.  the usefulness in the trinity was it used everything from 25% to  100% equity's . the heavy equity portfolio's failed at only the 4 worst time frames . the other allocations with less equity's failed at  those 4 plus more dates they found that those allocations could not get through  .

that was why they did the trinity study , to identify the additional time frames other groups would have failed in  other than the big 4 because they used less equity's. . it was a given the 25% equity portfolio couldn't get through the 4 reference dates , they just had a whole lot more they couldn't get through as well  .

True.  But focusing only on stocks and bonds (which sometimes have a tendency to correlate in crashes) certainly affected when the low years were.  As an extreme example, a 100% commodities portfolio would have a much different schedule to the highs and lows. 

That said, I absolutely agree that one should understand the timeframes involved and the assumptions that apply to all analyses.  Taking any chart or study at face value is a bad idea.

i thought this article was fun reading . it is about retiring in the 1960's.

basically  as they said  Pure 4% withdrawals for a retirement starting in 1965 were a disaster, with the portfolio dropping to $0 in about 25 years.  This occurred regardless of asset allocation.  A portfolio of 50% stock / 50% bonds failed just as surely as a portfolio of 100% stock

http://www.gocurrycracker.com/the-worst ... ment-ever/

mathjak107 wrote: i thought this article was fun reading . it is about retiring in the 1960's.

basically  as they said  Pure 4% withdrawals for a retirement starting in 1965 were a disaster, with the portfolio dropping to $0 in about 25 years.  This occurred regardless of asset allocation.  A portfolio of 50% stock / 50% bonds failed just as surely as a portfolio of 100% stock

http://www.gocurrycracker.com/the-worst ... ment-ever/

The decade where I came of age. I wonder how many people back then even had a concept of what a "portfolio" was. Definitely not my parents.

screwtape wrote:
The decade where I came of age. I wonder how many people back then even had a concept of what a "portfolio" was. Definitely not my parents.

  based on my parents and their being at the start of raising a family around that time, i would say probably aware of portfolios, but it was something only the wealthy, or people "in the business" had. most everyone else was focused on a pensions for retirement or maybe building a business.

l82start wrote:

screwtape wrote:
The decade where I came of age. I wonder how many people back then even had a concept of what a "portfolio" was. Definitely not my parents.

  based on my parents and their being at the start of raising a family around that time, i would say probably aware of portfolios, but it was something only the wealthy, or people "in the business" had. most everyone else was focused on a pensions for retirement or maybe building a business.

My Dad earned a pension with the company he worked for (Bordens) for over 40 years. It paid $85/month when he retired but with no COLA. They also had health insurance benefits but that was discontinued after about 15 years into retirement. My mother thought she was going to continue to receive the $85/month when my Dad died two years ago but Bordens had no record of my father's opting for a spousal benefit so we said f*** it. Who cares about an $85/month pension now?

My parents financed their retirement on the sale of their property and the sale of my grandparent's farm. Retiring in the late 70's they invested it all in CD's at incredible interest rates and made a killing for several years, probably doubling their money. That sustained them throughout and my mother still probably has enough to last her in the assisted living facility where she lives at age 95.

The basic lesson I learned from all that is that everybody's retirement will be different and there are no pat answers. Probably not even the PP.

l82start wrote:

screwtape wrote:
The decade where I came of age. I wonder how many people back then even had a concept of what a "portfolio" was. Definitely not my parents.

  based on my parents and their being at the start of raising a family around that time, i would say probably aware of portfolios, but it was something only the wealthy, or people "in the business" had. most everyone else was focused on a pensions for retirement or maybe building a business.

most americans still have no clue . they are financially ignorant .

they not only know very little but will not pay a dime to seek advice either. the hodge podge of stuff people buy  is just insane  . i see the 401k reports at work and nearly no one has a plan for what they do .

even financial planners that really understand the 2nd 1/2 of the game are few and far between.

any planner can tell you what to buy or do in the first 1/2 of the game , the accumulation stage.  but few really understand retirement tax planning , theory and keep up with the latest research in that field.

most give wrong advice when it comes to what vehicles to keep what assets.

for the most part the old theory of keeping  equity's in a taxable account and bonds and cash in a deferred account is quite wrong.

what money to spend down first can be wrong as well as leaving the deferred money alone may be the worst thing to do yet i still see planners tell clients that. .

it really was the lack of understanding about retirement planning that most advisers have that made me go out and get my own education.

i want as many of the odds and variables on my side as i can .


just look at how little folks really understand about taking social security.

the biggest financial decision , usually involving the largest  sum of money in their life and they seek zero help in making any choices  or picking any options.

i have seen couples leave 100k on the table by making the wrong decision about spousal benefits .

it is usually not the things we don't know that makes us fail as much as it is the things we know that aint so.

i recently was with a couple who made the decision to both delay taking ss because the survivor benefit was higher .  it was the worst choice they could have made .

if the higher wage earner lived then all the lower earning spouse did is give up years of checks since the higher earner would not get survivor benefits.

if it was the lower earner who lived than they get the higher earners benefit anyway.

when i explained that to them they realized they gave up years of checks for nothing and the lower earner should have filed right away.

iwealth wrote: How are you calculating a duration for stocks? This concept is foreign to me.

It is very easy if you use the S&P 500 which already takes into account stock buybacks.  Take 1 and divide the current yield into it.