Valuation-Informed Indexing #521: New Article on Safe Withdrawal Rates Shows How Far We Have Come in 18 Years

I’ve posted Entry #521 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called New Article on Safe Withdrawal Rates Shows How Far We Have Come in 18 Years.

Juicy Excerpt: Bengen states: “Examining the chart, one is immediately struck by the countervailing behavior of the two data series. High initial withdrawal rates are consistently associated with ‘cheap” stock markets and low initial withdrawal rates are associated with ‘expensive’ stock markets. The correlation between the two data series is negative 0.75, which is quite strong. Obviously, it paid to retire when stocks were cheap!”

That’s Valuation-Informed Indexing, not Buy-and-Hold. That’s market timing. Bengen wouldn’t have dared to write something like that in 2002 and Financial Advisors wouldn’t have dared to publish it at that time. We’ve come a long way in 18 years!