tag:blogger.com,1999:blog-17478547.post8636873600614720951..comments2024-03-27T20:17:30.597+08:00Comments on Growing your tree of prosperity: Early Retirement ScenariosChristopher Ng Wai Chunghttp://www.blogger.com/profile/15534057160494859977noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-17478547.post-89811039405062683722018-10-19T23:56:57.393+08:002018-10-19T23:56:57.393+08:00Thanks, you gave me a lot to think about !Thanks, you gave me a lot to think about !Christopher Ng Wai Chunghttps://www.blogger.com/profile/15534057160494859977noreply@blogger.comtag:blogger.com,1999:blog-17478547.post-75059645620831345052018-10-19T20:13:15.119+08:002018-10-19T20:13:15.119+08:00Using portfolio visualizer's monte carlo funct...Using portfolio visualizer's monte carlo function, a portfolio of global stocks 50% US and 50% global ex-US, at initial 4% withdrawal adjusted for inflation:<br /><br />(i) 88.8% success rate over 30 years.<br /><br />(ii) 80.6% success rate over 50 years.<br /><br />However if stress test with, say, worst first 2 years, then the success rate drops drastically:<br />(iii) 42.2% success rate over 30 years.<br /><br />(iv) 35.8% success rate over 50 years.Unknownhttps://www.blogger.com/profile/02938450718690565242noreply@blogger.comtag:blogger.com,1999:blog-17478547.post-62851521919140109902018-10-19T13:25:24.320+08:002018-10-19T13:25:24.320+08:00The big spanner in the works is always sequence of...The big spanner in the works is always sequence of returns risk.<br /><br />E.g. if one were to retire on 31 Dec 1999 and do the drawdown from 2000-2003...<br /><br />At the end of 2003, inputting the remaining market value of portfolio into the spreadsheet ... would it still show 95% success at the same rate of withdrawal?<br /><br />GFC was actually a "good" bear market in that the crash & subsequent 62% retracement recovery occurred in a very short time.<br /><br />Central banks may not have luxury or political will for wanton debt enlargement (i.e. QE) in the next global recession, and it may play out in a protracted manner like in the early 2000s or early 1970s.Unknownhttps://www.blogger.com/profile/02938450718690565242noreply@blogger.com