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Re: Should we adjust the SWR based on last All Time High?
Posted: Thu Apr 20, 2017 12:30 pm
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.
Re: Should we adjust the SWR based on last All Time High?
Posted: Sun Apr 23, 2017 6:53 pm
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.