Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
You missed this part:
Michael: And so, what do you think about as the number in the environment today?
Bill: I think somewhere in 4.75%, 5% is probably going to be okay.
You need to stop your fraudulent and criminal behavior, Rob. Your board needs to be opened up to honest posting and you have been blocking that.
Greaney wasn’t saying that a 4 percent safe withdrawal rate can always be achieved in some way. He was saying that someone going with an 80 percent stock allocation always has a 4 percent safe withdrawal rate. That’s wildly wrong. At the top of the bubble, the safe withdrawal rate for someone going with an 80 percent stock allocation was 1.6 percent. It was possible at that time to get a 5.8 safe withdrawal rate going with 100 percent TIPS. A high safe withdrawal rate was certainly available to investors. But Greaney was not telling people how to get there. He was encouraging them to go with a high stocks/low safe withdrawal rate portfolio.
Investors always need to compare what they can do with different asset classes. That’s how you choose a good stock allocation. You look at the pros and cons of different allocations and choose the one that is best for you. The problem with Buy-and-Hold is that it discourages people from doing that. If an investor isn’t going to engage in market timing, why should he make a comparison of the merits of different asset classes? Say that getting your asset allocation right is 70 percent of the stock investing game. Once you adopt a Buy-and-Hold strategy, you have forsaken all the benefits of doing well with that 70 percent of the game. Buy-and-Holders don’t engage in market timing. So there is no reason for them to perform the comparison that an investor needs to perform to invest successfully for the long term.
My sincere take.
Rob
Your VII strategy has failed over the last 2 decades. No thanks. I don’t want any of that stinky garbage.
You are of course free to go your own way, Anonymous.
I naturally wish you the best of luck with whatever alternative strategy shows more promise in your eyes.
My best wishes.
Rob
Don’t you think it is irresponsible for you to try and trick people into your market timing scheme, when it has never worked for even one single person, including you?
If I had a cure for cancer that had passed peer review, would it be irresponsible for me to tell people about it? I say “no.” If there were some people who elected not to make use of the cure, I would of course be fine with that. It’s their body, it’s their choice. But, no, I do not find it even a tiny bit irresponsible to let people know what the last 39 years of peer-reviewed research teaches us about how the stock market works. I think that it is 100 percent imperative that we get the word out to everyone on the planet.
Say that there is something wrong with Shiller’s research. That could be, right? The fact that he was awarded a Nobel prize does not make him God. It is at least theoretically possible that Shiller made a mistake somewhere down the line. You know what we could do to increase the offs of bringing that mistake to light quickly? We could open ever discussion board and blog on the internet to honest posting, without a single exception. When we do that, we will identify any weaknesses in the Shiller model. We should all want that, just as we should all want to discover any weaknesses in the Buy-and-Hold Model.
My sincere take.
My best and warmest wishes to you and yours.
Rob