Spreadsheet

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fishdrzig
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Spreadsheet

Post by fishdrzig » Fri Jul 03, 2015 6:36 pm

Can someone post a link to the most current spreadsheet for the 4 x 25 HBPP.  Thank you
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Re: Spreadsheet

Post by EdwardjK » Fri Jul 03, 2015 7:21 pm

What exactly are you after?
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Re: Spreadsheet

Post by fishdrzig » Fri Jul 03, 2015 7:38 pm

Just a workable rebalancing spreadsheet
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Re: Spreadsheet

Post by MediumTex » Sat Jul 04, 2015 8:28 am

There is a stickied post at the top of the page with PP spreadsheets.
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Re: Spreadsheet

Post by fishdrzig » Sat Jul 04, 2015 1:24 pm

Kind of hard to follow and now is two years old.  Anyone have a link to a current one?
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Re: Spreadsheet

Post by mathjak107 » Sun Jul 05, 2015 4:06 am

i would love to be able to see the growth of 10k from 1987 in dollars with the 4 part pp for comparisons .

i did a quick comparison since 1982 of  prpfx  vs some other  conservative fund like fidelity puritan . i have to say the price you paid  waiting for that next  calamity was quite high.

don't forget we had 3 major crashes ,  more recessions than i care to count as well as having in this  time frame one event that almost took down the entire financial system..

10k in prpfx grew to 71k today while puritan grew to 235k  .


prpfrx vs one of the most popular conservative funds wellesly income was 71k since 1982 vs 295k today.


these differences really have to stop and make you think if giving up so much of a your nest egg  protecting against something that may never happen is really worth it.

you could lose more than 50% of what you gained  in wellesley and still be way a head of planning for that 50% drop.

yes , to some the protection from the unknown may be worth it , i get that . but that protection can also be quite hazardous to your wealth in itself.
Last edited by mathjak107 on Sun Jul 05, 2015 4:43 am, edited 1 time in total.
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Re: Spreadsheet

Post by sophie » Sun Jul 05, 2015 7:17 am

I've been using the same spreadsheet for more than two years.  I assure you it is not subject to bit decay  ;D
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Re: Spreadsheet

Post by mathjak107 » Sun Jul 05, 2015 8:32 am

here are my results just following the fidelity insight newsletter which i have been from 1987 .

it just uses nothing special fidelity funds, we are talking over 220k compared to 67k for the pp.

http://www.fidelityinsight.com/about/pe ... f2012.html
Last edited by mathjak107 on Sun Jul 05, 2015 8:54 am, edited 1 time in total.
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Re: Spreadsheet

Post by mathjak107 » Sun Jul 05, 2015 8:34 am

Desert wrote:
mathjak107 wrote: i would love to be able to see the growth of 10k from 1987 in dollars with the 4 part pp for comparisons .
Since 1987,

The PP returned a CAGR of 7.04% with the worst year -2.0%.  Final balance $67,000. 
A 60/40 Bogle returned a CAGR of 9.16% with the worst year -20.0%.  Final balance $116,500.
now keep in mind that time frame included lots of nasty events including the almost  collapse of the financial system .  116k vs 67k is quite a price to pay for protection against the remote chane of Armageddon .

i won't even compare it to the results my newsletter got , which by the way were no different than any other new letters of the day.  fidelity monitor did even better before they merged with fidelity insight.
Last edited by mathjak107 on Sun Jul 05, 2015 8:37 am, edited 1 time in total.
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Re: Spreadsheet

Post by mathjak107 » Sun Jul 05, 2015 9:08 am

i was a bit on the conservative side ,i aimed for the volatility of the s&p 500 but with better returns
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Re: Spreadsheet

Post by mathjak107 » Sun Jul 05, 2015 9:13 am

i just had to finally give up the newsletter and do my own portfiolio because i wanted a 50/50 mix and they had a 25/75 in the very conservative  and 70/30 in the growth and income..

i was running a mix of both to get something in the middle but it was to much overlap of the same bond funds.
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Re: Spreadsheet

Post by MachineGhost » Sun Jul 05, 2015 4:15 pm

mathjak107 wrote: i would love to be able to see the growth of 10k from 1987 in dollars with the 4 part pp for comparisons .

Code: Select all

1987	 $10,704.12 
1988	 $11,092.20 
1989	 $12,698.46 
1990	 $12,926.69 
1991	 $14,426.08 
1992	 $14,912.98 
1993	 $16,847.99 
1994	 $16,448.59 
1995	 $19,679.71 
1996	 $20,689.75 
1997	 $22,388.68 
1998	 $25,287.55 
1999	 $26,119.68 
2000	 $26,847.33 
2001	 $26,948.70 
2002	 $27,683.73 
2003	 $31,499.19 
2004	 $33,413.03 
2005	 $35,962.92 
2006	 $40,067.84 
2007	 $45,385.31 
2008	 $46,629.80 
2009	 $49,562.52 
2010	 $56,009.70 
2011	 $62,602.99 
2012	 $66,245.90 
2013	 $64,560.03 
2014	 $71,198.48 
Last edited by MachineGhost on Sun Jul 05, 2015 4:38 pm, edited 1 time in total.
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Re: Spreadsheet

Post by MachineGhost » Sun Jul 05, 2015 4:41 pm

mathjak107 wrote: here are my results just following the fidelity insight newsletter which i have been from 1987 .

it just uses nothing special fidelity funds, we are talking over 220k compared to 67k for the pp.

http://www.fidelityinsight.com/about/pe ... f2012.html
You can't compare a 100% stock growth portfolio strategy to a wealth preservation portfolio!

Have you read HB's books recently?  Because HB emphasis focusing on your job and saving for growth, not your portfolio.  If you want more growth, than that is what the VP is for.
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Re: Spreadsheet

Post by mathjak107 » Sun Jul 05, 2015 6:57 pm

The comparison was relating back to what i said. If you need to grow assets for retirement you only get one shot at it.

Deciding to seek the protection from that calamity we are still waiting for can leave you well short of goals.

Over the long term the growth has been way lower than more standard portfolios including wellesley income which is pretty conservative all by itself.
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Re: Spreadsheet

Post by MachineGhost » Sun Jul 05, 2015 11:11 pm

mathjak107 wrote: The comparison was relating back to what i said. If you need to grow assets for retirement you only get one shot at it.

Deciding to seek the protection from that calamity we are still waiting for can leave you well short of goals.

Over the long term the growth has been way lower than more standard portfolios including wellesley income which is pretty conservative all by itself.
No argument from me.  So, how can we modify the PP so it is better performing?  The concept of surviving any economic climate is very prudent.
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Re: Spreadsheet

Post by Pointedstick » Sun Jul 05, 2015 11:24 pm

MachineGhost wrote:
mathjak107 wrote: The comparison was relating back to what i said. If you need to grow assets for retirement you only get one shot at it.

Deciding to seek the protection from that calamity we are still waiting for can leave you well short of goals.

Over the long term the growth has been way lower than more standard portfolios including wellesley income which is pretty conservative all by itself.
No argument from me.  So, how can we modify the PP so it is better performing?  The concept of surviving any economic climate is very prudent.
Tilt away from insurance and toward prosperity, I think. Prosperity is more common than apocalypse, and mathjak is right that things do recover eventually. We have more than enough cash to tide us over during particularly bad scenarios, and in Japan-like environments, gold and bonds being uncorrelated assets will also help. Since we only have 25% stocks in the first place, an equal amount in gold now seems overweighted given that we also have long bonds and cash to keep us from jumping off a bridge when things go sour. I'm working on something that I think will make me sleep better than the PP...
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Re: Spreadsheet

Post by Tyler » Sun Jul 05, 2015 11:33 pm

mathjak107 wrote: Deciding to seek the protection from that calamity we are still waiting for can leave you well short of goals.
Stocks do not eliminate that risk.  They amplify it.  Goals should not ignore uncertainty, and good planning is about more than targeting the highest returns.

Let's use the example of saving for a college fund.  Let's say one wants $100k in today's dollars 20 years from now.  They save $2k/year (adjusted up for inflation each year) and invest in a TSM index.  Looking at every rolling 20-year investment period since 1972, the median end value is $101k.  But half the results are lower than that, and the minimum (from one of the most recent periods!) is only $51k.  Unless you have an extra $49k laying around, the risk here is that regardless of your best efforts you can't afford to send your daughter to college.

Now let's save the same $2k/year and invest in the PP.  The median end value is only $69k.  Yep, that's significantly lower.  Saving $3k/year increases the median to $103k.  But the minimum is only $93k.  In the worst-case situation, you need an extra $7k.  That's pretty reasonable. 

In case you're wondering, let's say you saved the same $3k/year and invested it all in stocks.  The median end value is $152k, and the minimum is $77k.  While the median return is 50% higher, the downside risk of your daughter not affording college is actually greater than if you followed the same plan with the PP!

Basically, stocks provide higher average growth, but with much higher uncertainty.  The markets are not guaranteed to cooperate on your timeframe, and 100% stocks run a great risk of tanking when you need them.  If one can simply wait ten or more years to recover then it may work out in your favor but that's not always practical.  I personally prefer to invest more conservatively with less uncertainty and compensate by saving more.  My goals are too important to me to leave them to chance. 
Last edited by Tyler on Mon Jul 06, 2015 1:49 am, edited 1 time in total.
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Re: Spreadsheet

Post by MachineGhost » Sun Jul 05, 2015 11:36 pm

Pointedstick wrote: Tilt away from insurance and toward prosperity, I think. Prosperity is more common than apocalypse, and mathjak is right that things do recover eventually. We have more than enough cash to tide us over during particularly bad scenarios, and in Japan-like environments, gold and bonds being uncorrelated assets will also help. Since we only have 25% stocks in the first place, an equal amount in gold now seems overweighted given that we also have long bonds and cash to keep us from jumping off a bridge when things go sour. I'm working on something that I think will make me sleep better than the PP...
I've done that with absolute return to get the return up without increasing the drawdown, but there's only a limited opportunity set of that available.  Any time you increase the equity, the risk goes up vs PP.  So what have you come up with?
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Re: Spreadsheet

Post by Pointedstick » Sun Jul 05, 2015 11:44 pm

MachineGhost wrote:
Pointedstick wrote: Tilt away from insurance and toward prosperity, I think. Prosperity is more common than apocalypse, and mathjak is right that things do recover eventually. We have more than enough cash to tide us over during particularly bad scenarios, and in Japan-like environments, gold and bonds being uncorrelated assets will also help. Since we only have 25% stocks in the first place, an equal amount in gold now seems overweighted given that we also have long bonds and cash to keep us from jumping off a bridge when things go sour. I'm working on something that I think will make me sleep better than the PP...
I've done that with absolute return to get the return up without increasing the drawdown, but there's only a limited opportunity set of that available.  Any time you increase the equity, the risk goes up vs PP.  So what have you come up with?
Well, I haven't finished my testing and investigation, but what the heck:

15% Small-cap value US stocks
15% Emerging market stocks
10% Gold
60% intermediate treasuries / 30%+30% barbell, whichever you're more comfortable with

I know you don't like SCV but I do! If its historical outperformance is over, then it's still no big deal. The barbell is slightly better, but the bullet is more emotionally palatable and may do better with rising rates; choose your favorite.

This portfolio could be further modified by reducing the fixed income to 50% of the total and splitting that extra 10% between the stock funds, if you're comfortable stomaching slightly higher drawdowns. But the returns are phenomenal and it still has a PP-like character with lots of bonds, an easy place to make withdrawals from, some physical gold, and low asset correlation.
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Re: Spreadsheet

Post by rickb » Mon Jul 06, 2015 12:11 am

Pointedstick wrote: Since we only have 25% stocks in the first place, an equal amount in gold now seems overweighted given that we also have long bonds and cash to keep us from jumping off a bridge when things go sour. I'm working on something that I think will make me sleep better than the PP...
Definitely share what you come up with, but ...

... if you reduce the gold percentage how well will you fare in a real SHTF scenario (e.g. government collapse)? Yes, this is unlikely, but it's one of those fat tails that absolutely destroys most portfolios.  I'm definitely not saying the sky is falling, but it might fall and if it does what will I be left with if I follow your plan? [10% apparently - honestly, is this OK with you?]

... if you reduce the long term bond percentage how well will you fare in a prolonged deflationary scenario (e.g. Japan, since approximately forever ago)?

... if you decrease the cash percentage, how well will you fare in a flat out 1929-style depression, where stocks fell by 90%?
mathjak107 wrote: If you need to grow assets for retirement you only get one shot at it.
Yes, a stock heavy portfolio will eventually recover.  But a stock heavy portfolio will also eventually be completely killed by government collapse, and before then perhaps reduced by 90% by a 1929 style depression.  If you're near or in retirement it seems to me like these are scenarios you ought to care about.  You only get one shot at growing your assets for retirement, but when you're close to (or after) retirement if you encounter a significant loss you're truly fucked.
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Re: Spreadsheet

Post by MachineGhost » Mon Jul 06, 2015 12:21 am

Pointedstick wrote: Tilt away from insurance and toward prosperity, I think. Prosperity is more common than apocalypse, and mathjak is right that things do recover eventually. We have more than enough cash to tide us over during particularly bad scenarios, and in Japan-like environments, gold and bonds being uncorrelated assets will also help. Since we only have 25% stocks in the first place, an equal amount in gold now seems overweighted given that we also have long bonds and cash to keep us from jumping off a bridge when things go sour. I'm working on something that I think will make me sleep better than the PP...
Seems easy enough.  PP with silver pre-1968 using all value, large cap, small cap and S&P 500:

Code: Select all

Year	Value	Large	Small	SP500
1928	11.78%	8.74%	12.11%	12.17%
1929	12.70%	6.39%	20.54%	-4.81%
1930	-15.15%	-7.85%	-16.82%	-12.04%
1931	-12.27%	-7.28%	-11.88%	-11.19%
1932	-12.47%	-13.40%	-10.71%	-4.65%
1933	36.10%	18.89%	44.40%	33.19%
1934	62.55%	21.93%	72.66%	8.36%
1935	8.88%	5.52%	12.89%	16.03%
1936	10.76%	6.88%	24.98%	4.10%
1937	21.85%	8.01%	23.86%	-8.80%
1938	-14.07%	-7.72%	-12.98%	7.93%
1939	-2.13%	3.63%	-1.79%	-3.50%
1940	2.98%	1.87%	5.33%	-1.96%
1941	-5.95%	-1.48%	-6.08%	-2.57%
1942	7.91%	5.09%	7.32%	12.13%
1943	19.71%	4.25%	30.65%	6.87%
1944	36.69%	6.67%	46.83%	5.41%
1945	34.61%	21.60%	36.33%	25.75%
1946	25.56%	14.39%	30.22%	3.62%
1947	-8.10%	-4.38%	-7.16%	-2.46%
1948	0.42%	-0.19%	-1.56%	0.41%
1949	4.01%	3.45%	2.24%	7.57%
1950	8.22%	7.61%	9.33%	10.24%
1951	21.43%	8.55%	17.00%	8.12%
1952	1.96%	4.30%	-0.40%	3.81%
1953	5.92%	4.82%	1.39%	1.27%
1954	-0.78%	1.73%	0.26%	15.14%
1955	18.60%	12.61%	18.36%	9.39%
1956	6.58%	5.49%	5.19%	1.77%
1957	2.48%	3.40%	1.07%	-1.13%
1958	-5.36%	-2.39%	-4.02%	10.93%
1959	21.76%	11.32%	19.29%	3.43%
1960	6.88%	6.53%	7.18%	3.87%
1961	0.42%	4.30%	2.68%	10.89%
1962	12.37%	12.04%	14.48%	3.98%
1963	0.70%	-0.55%	0.24%	8.37%
1964	9.81%	7.03%	6.55%	6.05%
1965	8.19%	4.68%	6.62%	4.03%
1966	13.80%	4.20%	14.12%	-1.13%
1967	13.33%	12.59%	12.84%	20.75%
1968	27.78%	11.22%	39.72%	8.99%
1969	12.29%	-1.39%	13.86%	-5.98%
1970	-0.35%	4.67%	-1.45%	8.06%
1971	7.50%	7.43%	3.25%	11.37%
1972	19.05%	18.25%	19.64%	19.32%
1973	20.30%	22.25%	17.96%	13.97%
1974	12.12%	15.35%	8.96%	12.45%
1975	-6.78%	-9.93%	-9.05%	6.04%
1976	25.21%	14.31%	23.47%	10.83%
1977	24.13%	12.22%	21.34%	5.42%
1978	17.93%	7.42%	18.76%	11.47%
1979	43.30%	36.54%	44.17%	39.63%
1980	15.13%	9.41%	15.84%	12.63%
1981	2.81%	4.41%	8.07%	-5.07%
1982	20.08%	15.88%	16.47%	21.73%
1983	9.26%	2.53%	4.73%	3.48%
1984	16.59%	6.51%	12.47%	2.75%
1985	13.49%	13.77%	7.90%	19.92%
1986	20.56%	23.34%	19.20%	18.96%
1987	8.48%	10.76%	6.47%	7.04%
1988	1.10%	0.80%	-2.35%	3.63%
1989	13.03%	11.26%	11.11%	14.48%
1990	5.90%	10.83%	3.94%	1.80%
1991	-3.08%	3.17%	-2.30%	11.60%
1992	14.87%	8.99%	16.78%	3.38%
1993	27.53%	12.66%	20.94%	12.98%
1994	8.71%	-0.53%	6.48%	-2.37%
1995	12.67%	10.38%	9.08%	19.64%
1996	8.81%	8.86%	7.41%	5.13%
1997	6.10%	5.62%	4.46%	8.21%
1998	14.59%	14.57%	10.41%	12.95%
1999	-1.71%	4.92%	-4.05%	3.29%
2000	14.21%	8.81%	16.02%	2.79%
2001	2.37%	1.54%	-0.07%	0.38%
2002	16.85%	4.11%	18.27%	2.73%
2003	7.50%	0.69%	5.87%	13.78%
2004	34.69%	11.25%	30.22%	6.08%
2005	16.16%	9.20%	12.68%	7.63%
2006	9.76%	8.80%	7.81%	11.41%
2007	18.48%	15.86%	16.35%	13.27%
2008	8.28%	13.59%	8.84%	2.74%
2009	-14.02%	-10.14%	-12.88%	6.29%
2010	34.65%	18.62%	30.49%	13.01%
2011	17.75%	15.09%	18.40%	11.77%
2012	-1.31%	2.22%	-2.14%	5.82%
2013	-2.54%	-2.54%	-2.54%	-2.54%
2014	10.28%	10.28%	10.28%	10.28%
Total	963.20%	627.13%	964.85%	634.47%
I used S&P 500 for last two years; too lazy to update.

See Desert, small is irrelevant. It is a sloppy proxy for value.  Large is just a sloppy proxy for overvalued.
Last edited by MachineGhost on Mon Jul 06, 2015 12:31 am, edited 1 time in total.
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Re: Spreadsheet

Post by MachineGhost » Mon Jul 06, 2015 12:41 am

Pointedstick wrote: Well, I haven't finished my testing and investigation, but what the heck:

15% Small-cap value US stocks
15% Emerging market stocks
10% Gold
60% intermediate treasuries / 30%+30% barbell, whichever you're more comfortable with

I know you don't like SCV but I do! If its historical outperformance is over, then it's still no big deal. The barbell is slightly better, but the bullet is more emotionally palatable and may do better with rising rates; choose your favorite.
SCV is just data mining and you can't invest in the bottom 10% of illiquid securities where all the "small" outperformance was.  Value is market cap agnostic.  Get away from market caps, they are nothing but a mirage!

And emerging today was today's frontier yesteryear, so you can't invest in emerging today and expect the same returns as yesteryear's emerging.  It has to be today's frontier.  And then you realize how risky it really was yesteryear.  BRIC only become what we think of today's emerging in the early 2000's after its decades of outperformance as today's frontier.
Last edited by MachineGhost on Mon Jul 06, 2015 12:42 am, edited 1 time in total.
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Re: Spreadsheet

Post by mathjak107 » Mon Jul 06, 2015 2:41 am

Tyler wrote:
mathjak107 wrote: Deciding to seek the protection from that calamity we are still waiting for can leave you well short of goals.
Stocks do not eliminate that risk.  They amplify it.  Goals should not ignore uncertainty, and good planning is about more than targeting the highest returns.

Let's use the example of saving for a college fund.  Let's say one wants $100k in today's dollars 20 years from now.  They save $2k/year (adjusted up for inflation each year) and invest in a TSM index.  Looking at every rolling 20-year investment period since 1972, the median end value is $101k.  But half the results are lower than that, and the minimum (from one of the most recent periods!) is only $51k.  Unless you have an extra $49k laying around, the risk here is that regardless of your best efforts you can't afford to send your daughter to college.

Now let's save the same $2k/year and invest in the PP.  The median end value is only $69k.  Yep, that's significantly lower.  Saving $3k/year increases the median to $103k.  But the minimum is only $93k.  In the worst-case situation, you need an extra $7k.  That's pretty reasonable. 

In case you're wondering, let's say you saved the same $3k/year and invested it all in stocks.  The median end value is $152k, and the minimum is $77k.  While the median return is 50% higher, the downside risk of your daughter not affording college is actually greater than if you followed the same plan with the PP!

Basically, stocks provide higher average growth, but with much higher uncertainty.  The markets are not guaranteed to cooperate on your timeframe, and 100% stocks run a great risk of tanking when you need them.  If one can simply wait ten or more years to recover then it may work out in your favor but that's not always practical.  I personally prefer to invest more conservatively with less uncertainty and compensate by saving more.  My goals are too important to me to leave them to chance.

the only important consideration is time . anything less than 15 years can be dicey with equities although most 10 year periods would put the odds in your favor too. 

the problem folks have is not having a plan that matches assets to time frames.

they dump money in to long term investments without  preperation for short term needs.

but even then , if you do not get that  demand for cash early on you are still good.

as i demonstrated earlier even if a retiree went with 100% equity's and spent down in good and bad times they still would have had over a 90% success rate which is just about as good as the proverbial 50/50  in retirement planning  . in fact if they cut spending by a mere 1/2%  they would have had 100% success through the worst of times in every rolling 30 year period ever.

personally i think folks worry about these down turns and the what if's more than reality and a good plan ever played them out.

planning around the remote flyers has rarely payed off and more is usually left on the table that could have been used to produce higher spending levels in retirement .

fear can do some crazy hings to our minds , especially the fear of losing money . the truly successful  people are able to not let that fear influence what data , facts and odds say.

insurance company's like aflak have built billion dollar business's based around the fact people take the remote chances of things happening and blow them up bigger than life in their minds .


as much as i always had a love for the concept of the pp , over my investing time frame since 1987 the pp would have fallen way short of where i am today and i would not  even be retiring in 15 more working days had i elected to go with the pp back then as i would be to far behind goal/.

per 10,000 to have a difference of just 67k in the pp vs 203k in the fidelity insight model is a huge difference after 27 years. 

your time frame may be different but historically you would really have to cherry pick to find different outcomes then falling way short most of the time..

insurance has a cost and always will hav a cost and that is what you pay for with the pp. but like all insurance the odds are never on your side for the pay off.

as i stated before , the pp is fine for preserving the money you made after you reach goal and made it , not before unless you have other sources of growth besides your investments.

the problem in retirement with the pp is it is untested and can't be tested through those worst case scenario's .

if the results from just having longer term corporate bonds in the trinity study vs bill bengans work are any indicator than there is a good chance the levaraged long bonds may have increased failure periods too , so with that being the case i rather  bet my retirement outcome on what was ,what is and what has a reasonably good chance of continuing .
Last edited by mathjak107 on Mon Jul 06, 2015 3:25 am, edited 1 time in total.
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Tyler
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Re: Spreadsheet

Post by Tyler » Mon Jul 06, 2015 3:54 pm

@Mathjak: I understand your perspective.  Mine is just very different.

The PP is not about investing fearfully.  It is about investing neutrally.  There’s a very big difference.  You should read more here than the threads of new PP investors (like yourself) who get spooked in the first few months.  Veteran PP investors have a unique outlook.

From my perspective you were lucky to have invested in the timeframe you did.  The newsletter was probably irrelevant and provides a false sense of security.  I’m happy for you, but times change and that luck probably won’t repeat for others.

Time does not eliminate all investing risk.  That’s a very common logical fallacy.  It amplifies uncertainty which increases time-based risk of failure when saving towards goals that cannot move. People who rely on investments to get rich more often than not end up disappointed, and as we've seen here recently those who put too much retirement hope into long-term investments alone tend to be very unhappy people.  Ramping up volatility chasing a faster exit only makes it worse. 

For reference of where I’m coming from, you mention that you needed 27 years of high stock returns to save towards retirement.  I had terrible investing luck before discovering the PP and still retired in 14.  I followed HB’s mantra that your wealth comes from your income (and savings) before I knew who he was, and on that fast track stocks were an inferior investment choice as they are volatile as hell. Returns were nearly irrelevant compared to my savings rate, but the volatility was a massive risk to my early retirement plans.  There’s more to saving for retirement than maximizing average returns, and uncertainty really does matter.  I was not fearful at all.  To the contrary, I was tremendously aggressive and proactive!  I just didn't idolize investments as part of the process.  The PP is actually pretty popular among the early retirement crowd because it places more emphasis on personal choices than market faith.  Libertarians everywhere.  Fun bunch!

I’ve also shown that the PP has supported a higher SWR with a smoother ride than stock/bond portfolios since 1972.  It is fine to be uncomfortable that it cannot be backtested for hundreds of years, but one must still acknowledge that it has shown more reliable performance head-to-head.  Translating the Bengen vs. Trinity bonds factoid to the PP is to me an erroneous conclusion based on an incomplete understanding of what makes the PP tick.  And one must also remember that neither study argued that other portfolios cannot perform better than stock/bond allocations.  They studied stocks and bonds to the exclusion of all other assets simply because it was easier and more common. 

For the record, I believe you clearly have your investing head on straight and have made good decisions.  I just want to share a different perspective from someone the PP works extremely well for.
Last edited by Tyler on Mon Jul 06, 2015 5:06 pm, edited 1 time in total.
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Re: Spreadsheet

Post by mathjak107 » Mon Jul 06, 2015 4:04 pm

but taking emotions out of the equation it really does not matter what time frame you want to pick as long as .it is for the long haul  . the pp and more conventional portfolio's went through identical time frames good and bad.

with few exceptions going out 15 years or more odds are you will have accumulated considerably less for retirement.

even when it comes to retirement spending we have never ever had a 30 year time frame that a conventional 50/50 mix or higher would have done poorly at it during the worst of times drawing 4% inflation adjusted.


i still say the pp is great for preserving the assets after you make it but you run a pretty good chance of lagging if you  need to accumulate a nest egg that meets your goals.


as long as folks understand that if they set their sights on having a certain amount by retirement based on conventional averages  they may be quite far off  if  they are using the pp as  that protection has a  cost that will weigh on returns unless we have particularly poor markets.

2000 to 2015 was a rare occurrence historically where we had 2 back to back recessions.

even so returns were fine for a diversified portfolio . i think i averaged about 6% in the insight model.

here is the diversified conventional mix that was used

you can see how it did vs just the s&p 500 over any time frame you like  . 

no gold no long term bonds .


Image
Last edited by mathjak107 on Mon Jul 06, 2015 4:24 pm, edited 1 time in total.
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