Here's the problem. The duration is out of your control unless you use downside risk management (whether that be trend following or adjusting portfolio duration). Are you 100% confident the government will everywhere and always always prop up the markets AND the public will not lose confidence in their actions being positive, as is now occuring in China and Japan?mathjak107 wrote: not quite true about steep drops , michael kitces did a paper on this . it is only the duration . a steep drop like 2008 was a non event to its success rate .. a modest drop over an extended duration has far more serious consequences .
the worst case scenario's the 4% safe withdrawal rate is based on already expects steep drops . that is why it is called a safe withdrawal rate . all it cares about is the 15 year average is at least a 2% real return .
https://www.kitces.com/blog/how-has-the ... al-crisis/
BTW, when I judge what is risk-reward optimal in terms of drawdowns, I take into consideration BOTH the magnitude AND the duration. 1987 was deep but a blip and it will have a lower risk score than something like 2007-2009.