Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“I don’t consider my difference with Greaney to be a “quibble.’”
Bengen and Trinity use the exact same methodology
I have the same differences with Bengen and Trinity. This is why I say constantly that we need to open every discussion board and blog on the internet to honest posting re the last 40 years of peer-reviewed research in this field. If we did that, someone would object every time someone else brought up Bengen or Trinity. The discussion that followed would help people to think through these matters. In time I believe that Bengen and Trinity would be discarded, which would be a very good thing in the event that they really do not contain valuation adjustments (Hint: They do not).
It is a national scandal that Trinity passed peer review. Shiller’s research was publicly available at that time, The entire point of the peer-review process is to see that earlier research findings are taken into account in newly developed research. If valuations affect long-term returns, as Shiller showed, there is precisely zero chance that the safe withdrawal rate can be determined without taking the valuation level that applies on the day the retirement begins into consideration. I mean, come on.
Rob
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