Should we adjust the SWR based on last All Time High?

Ask your investment, budget, and other money related questions here
Tyler9000
Posts: 1758
Joined: Fri Jun 01, 2012 11:45 pm

Re: Should we adjust the SWR based on last All Time High?

Post by Tyler9000 »

liberty wrote:
Thu Apr 20, 2017 11:47 am
Sure! It should be applied to the market's All Time High, MSCI World or similar if you are an international investor.
Unless you are 100% invested in a MSCI World index fund, then it doesn't work that way. And even then, you can support higher withdrawal rates by diversifying out of stocks. Many people wrongly have the idea that SWRs are some inherent attribute of the global stock market when in fact they are highly country and portfolio dependent.

Bostrom
Posts: 22
Joined: Fri May 30, 2014 6:11 pm

Re: Should we adjust the SWR based on last All Time High?

Post by Bostrom »

The stock market could continue to go up even though it's ATH. I think it would be better to compare it with the PE ratio. 50/PE would give you 3,33% SWR when the stock market is normally valued if we assume that a PE ratio of 15 is normal.

Post Reply