I’ve posted Entry #107 to my weekly Beyond Buy-and-Hold column at the Out of Your Rut site. It’s called Time Is the Forgotten Factor in Stock Investing.
Juicy Excerpt: Say that you retired in 1996 and used a 4 percent withdrawal (the withdrawal rate identified as “safe” in the discredited studies). Stocks were insanely overpriced in 1996. So your retirement was by no mean safe. Under many returns sequences, your retirement would fail before you reached age 95. But, if we did not see a price crash until the end of 2006 (and we didn’t — the price crash came in late 2008), your retirement became safe despite your reliance on gravely flawed research. The secret here is that those 11 years give the portfolio time to grow enough so that subsequent price crashes are not enough to destroy it entirely. Over time, the magic of compounding can grow such portfolios to very large amounts.