Square One
Posted: Mon Jun 28, 2004 1:57 am
Here's a link to a post that was put to the Motley Fool board by LivAboard on November 20, 2002. This post received 34 recommendations.
http://boards.fool.com/Message.asp?mid=18179867
LivAboard: "Hocus, why don't you post your retirement ideas again for those who weren't around when you did the first time, and for those of us with just a vague memory of what it was you were trying to discuss that is now clouded with months of discussing whether or not you were allowed to discuss it?"
Here is a link to my response, also dated November 20, 2002. This one received 33 recommendations.
http://boards.fool.com/Message.asp?mid=18180934
hocus: "Some portion of your investment portfolio needs to be absolutely safe, but not all of it. For example, I don't want to take any chances with the money used to finance the grocery or heating bills. But I am not so worried about the portion of my portfolio that supports my annual beach vacation.
"So I believe it is a good thing to know the safe withdrawal rate for various asset classes. I don't always go with the asset class that provides 100 percent safety, because those tend to be asset classes with low long-term growth potential. But I need to know the safe withdrawal rate for the various classes to make effective comparisons between them.
"Stocks, because of their volatility, have a low safe withdrawal rate. There is no one number- it varies from time to time and from circumstance to circumstance. But the number today appears to be something around 2 percent. That doesn't mean I don't like stocks. I love stocks. I just can't afford to put 80 percent of my money in an investment class with a 2 percent safe withdrawal rate.
"My goal is to determine the mix of assets that provides a reasonable overall withdrawal rate (in my case 4 percent) combined with the highest possible potential for long-term growth. For most investors, my expectation is that would be something near a 50 percent stock allocation "
http://boards.fool.com/Message.asp?mid=18179867
LivAboard: "Hocus, why don't you post your retirement ideas again for those who weren't around when you did the first time, and for those of us with just a vague memory of what it was you were trying to discuss that is now clouded with months of discussing whether or not you were allowed to discuss it?"
Here is a link to my response, also dated November 20, 2002. This one received 33 recommendations.
http://boards.fool.com/Message.asp?mid=18180934
hocus: "Some portion of your investment portfolio needs to be absolutely safe, but not all of it. For example, I don't want to take any chances with the money used to finance the grocery or heating bills. But I am not so worried about the portion of my portfolio that supports my annual beach vacation.
"So I believe it is a good thing to know the safe withdrawal rate for various asset classes. I don't always go with the asset class that provides 100 percent safety, because those tend to be asset classes with low long-term growth potential. But I need to know the safe withdrawal rate for the various classes to make effective comparisons between them.
"Stocks, because of their volatility, have a low safe withdrawal rate. There is no one number- it varies from time to time and from circumstance to circumstance. But the number today appears to be something around 2 percent. That doesn't mean I don't like stocks. I love stocks. I just can't afford to put 80 percent of my money in an investment class with a 2 percent safe withdrawal rate.
"My goal is to determine the mix of assets that provides a reasonable overall withdrawal rate (in my case 4 percent) combined with the highest possible potential for long-term growth. For most investors, my expectation is that would be something near a 50 percent stock allocation "