Far from a certainty. 30 year maximum SWR measures, calendar years granularity since 1872 comparing all-stock to 67/33 stock/precious metal. Yes in the average case all-stock was better, 7.3% average versus 6.9%, but with higher variance, 2.2% standard deviation vs 1.4%, so had higher highs (13% max vs 10.3%) and lower lows (3.5% vs 4.4%). Was better in 65% of cases, worse in 35%.Yes, what you see is correct. And you can test this with additional monte carlo modeling and also through backtesting. If you have a porfolio sufficiently large that you can use a low withdrawal rate (such as the 2% WR you use), over a long time horizon (such as the 30 years you use) an AA that is 100% stocks or close to that will beat most other allocations in performance without additional risk.
Statistics: Posted by seajay — Wed Nov 20, 2024 3:15 am — Replies 41 — Views 4583
