[Professor Jeremy Siegel says 75/25 in retirement]

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visualguy
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by visualguy »

abuss368 wrote: Sun Feb 09, 2020 12:47 pm Bonds provided a pool of assets (i.e. dry powder) during the financial crisis to rebalance into stocks along with new money.

In hindsight this was important.
Not really. You would have been better off being consistently in stocks instead. You can easily backtest it with on-line tools. The gains you missed out on by being out of the market with that money were more significant than the dry powder rebalancing effect you are taking about.
MathWizard
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by MathWizard »

I had planned on 75/25 for a long time.

I went through 2008/9 with 100% equities and did not capitulate. I think that I can handle 75/25 in retirement.

Whether it is optimal or not, we can only know after the fact.
anil686
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by anil686 »

Those who have read stocks for the long run should not be surprised. I am mildly surprised that he is even 75/25 vs 80/20 or higher. Something tells me that if he was talking to 25 year olds, he would be like 100/0 for your entire life.... :happy
GiannaLuna
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by GiannaLuna »

And with interest rates so low this means using safe dividend paying stocks to provide some needed income

Which ones are you/would you use?
SovereignInvestor
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by SovereignInvestor »

JoMoney wrote: Sat Feb 08, 2020 9:27 pm It makes as much sense as zero stock, 50/50, or even all stocks.
Nobody knows what the future returns will be, or what allocation will show as being "optimal" over some particular future time period, but you can look at the risks and find something that suits you.
John Bogle in Risk and Risk Control in an Era of Confidence wrote:... While I cannot give any investor a neat formula for risk control, I am comforted to share that inadequacy with the likes of Paul Samuelson, who tells us, “there is no way any professor of economics or any minister of the church can tell you what your risk tolerance must be.”
No, nor can any Wall Street seer, nor any money manager, nor any indexing advocate, nor even any grizzled veteran of 50 years in this wonderful business. ...
http://johncbogle.com/speeches/JCB_NE_Pension_4-00.pdf
I think the goal is to have highest probability of optimum portfolio but since decisions are based on past surely it's not guaranteed but ones selection would have highest expected probability of optimizing.
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midareff
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by midareff »

There have been decades that stocks performed better and decades that bonds performed better. In the absence of a quality crystal ball I'll stick with 50/50.
MnD
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by MnD »

70/30 for life in retirement with a 35 year investing horizon given joint life expectancy. Past 35 years of accumulation have averaged 75/25 with a fairly narrow range around that. Given that we are perhaps 1/2 way through a 70-year investing timeline, I don't see much if any case for more bonds. Unless you are suffering from anchoring bias with each new market high, the higher returns from equities overwhelms the variability over anything other than short to medium-short time frames.

The main case for lower equity allocations seems to be the presumption that one will panic and engage is destructive behavioral errors at the worst possible time with higher equity allocations. This wasn't the case for us in 1987, 1991, 2000/02 and 2008/09 - in fact we rebalanced to equity in all those situations. Given yields and overall economic indebtedness I wouldn't be shocked to see a sequence of returns where stocks and bonds are positively correlated in a bad way for a number of years. Bonds provide zero safe harbor in that situation. The only thing that adding more bonds did for the 1966 retiree was to speed up going broke by a year or two.
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by bertilak »

At 50/50 I am mostly at a 75/25 AA but in addition I have a bunch of bonds that are just gravy on top of my 75/25! They can be thought of as a safety net.
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visualguy
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by visualguy »

MnD wrote: Mon Feb 10, 2020 8:32 am 70/30 for life in retirement with a 35 year investing horizon given joint life expectancy. Past 35 years of accumulation have averaged 75/25 with a fairly narrow range around that. Given that we are perhaps 1/2 way through a 70-year investing timeline, I don't see much if any case for more bonds. Unless you are suffering from anchoring bias with each new market high, the higher returns from equities overwhelms the variability over anything other than short to medium-short time frames.

The main case for lower equity allocations seems to be the presumption that one will panic and engage is destructive behavioral errors at the worst possible time with higher equity allocations. This wasn't the case for us in 1987, 1991, 2000/02 and 2008/09 - in fact we rebalanced to equity in all those situations. Given yields and overall economic indebtedness I wouldn't be shocked to see a sequence of returns where stocks and bonds are positively correlated in a bad way for a number of years. Bonds provide zero safe harbor in that situation. The only thing that adding more bonds did for the 1966 retiree was to speed up going broke by a year or two.
Agreed, although not sure why you wouldn't go with an even lower percentage in bonds. Why 30% or 25%, and not 10% or 0%?
MnD
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by MnD »

visualguy wrote: Mon Feb 10, 2020 10:49 am
MnD wrote: Mon Feb 10, 2020 8:32 am 70/30 for life in retirement with a 35 year investing horizon given joint life expectancy. Past 35 years of accumulation have averaged 75/25 with a fairly narrow range around that. Given that we are perhaps 1/2 way through a 70-year investing timeline, I don't see much if any case for more bonds. Unless you are suffering from anchoring bias with each new market high, the higher returns from equities overwhelms the variability over anything other than short to medium-short time frames.

The main case for lower equity allocations seems to be the presumption that one will panic and engage is destructive behavioral errors at the worst possible time with higher equity allocations. This wasn't the case for us in 1987, 1991, 2000/02 and 2008/09 - in fact we rebalanced to equity in all those situations. Given yields and overall economic indebtedness I wouldn't be shocked to see a sequence of returns where stocks and bonds are positively correlated in a bad way for a number of years. Bonds provide zero safe harbor in that situation. The only thing that adding more bonds did for the 1966 retiree was to speed up going broke by a year or two.
Agreed, although not sure why you wouldn't go with an even lower percentage in bonds. Why 30% or 25%, and not 10% or 0%?
In retrospect I wish we would have been 100% for the 35-year accumulation phase but that falls under shoulda/coulda/woulda thinking. We were 100% equity in the account we had the most control over (taxable) during those decades and never deviated.
Going forward for perhaps 35 years in distribution we are comfortable with a 17.5% gross, 15% after-tax reduction in income under our % of annual portfolio withdrawal strategy in the event of a sudden 50% equity decline and given 50% of income comes from portfolio (0.5*0.5*0.7=17.5%).
So it is the stress test of spending decline that's guiding the 70/30 allocation in retirement in addition to the fact that we have most fixed income in the TSP G fund which would not suffer the same fate as holding fixed income with duration risk in a 1966 scenario.
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by bondsr4me »

theorist wrote: Sat Feb 08, 2020 7:48 pm There seems to be some sentiment among some experts that central banks “won’t let” a real crash (reducing equity values for a significant period) happen. I’ve heard this in several financial podcasts. This seems like a dangerous notion.
+1

As the saying goes: "this time is different".....uh huh...I believe Col. Potter (MASH) says it best...Horsehockey!
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Ramjet
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by Ramjet »

It would be more appealing if the equity recommendation was minimum volatility
anil686
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by anil686 »

There have been other posters who have referenced perhaps a 3% SWR. The closer the SWR gets to 2.5%, the more one would question why not be over 80% in equities (especially global equities where a total world has a dividend yield of roughly 2.5%). I mean, doing the math, even with zero percent real return over a decade (like between 2001-2011 arguably a really bad decade for stocks in general), an all equity portfolio with a 2.5% dividend yield and a 3% SWR would have a value of roughly 90% of the starting principal. That is after 10 years with zero return. Obviously stocks are probably not going to stay zero for many decades in a row - after 30 years, it probably would still be at roughly 50% of it's value. The biggest role for bonds, again IMO, is behavioral to help stay the course. But when you start planning on such low SWRs in which they start to parallel a dividend yield for an equity fund, does it matter much? Again, we are not saying 5-6% SWR with 100% equities... Not arguing for 100% equities, but just pointing out two things:
a). if people are planning for a 3% or lower SWR, I think the equity/bond ratio becomes far less important outside of behavioral tendencies (my opinion)
b). In a very low rate environment, a low percentage of equities could *potentially* expose an investor to inflation/interest rate risk which I would argue is with a low SWR would be a greater threat than a higher equity percentage.

both JMO and I find this thread interesting and have enjoyed the discussion...
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by mrspock »

I think there’s some wisdom to his advice, though the details of your situation matter. If you can afford and have the stomach for a bit more volatility, a bit more equity risk seems prudent vs loaning money for free.

I’m 70/30, and once I hit my “number” I’m going to let things drift upwards (75/25 till +30%, then maybe drift to 80/20 max from then on) as I could last a pretty long time on equity dividends and bonds (maybe 15-20 years or so). But that’s just me — I’d have such a massive margin after another 30% portfolio increase, a 50% decline would be unpleasant but not change my quality of life.
FIby45
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by FIby45 »

Interesting discussion given time period.

Last post was Feb 10- I think 9 days before market started to tank w COVID.

Curioua, how many of the 75-100% equities posters held the course? (Yes, I am aware it has all recovered.)
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by michaeljc70 »

I'm retired and 70/30. I don't plan to change that (but am not going to pretend I know what I will do in 20 or 30 years). Though low interest rates reinforce my AA currently, the driving force is that stocks return more than bonds over the long haul historically and I am comfortable with the level of risk.
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by Retrograde »

I am in the accumulation phase but I continued my 100/0 AA during COVID, but I wouls mention its not over yet.
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by jginseattle »

According to Larry Swedroe's "Willingness to Take Risk" table, a 70% equity exposure corresponds to a 45% maximum tolerable loss. This is up from the prior 30% loss primarily due to the low interest rate environment.
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warner25
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by warner25 »

nisiprius wrote: Sat Feb 08, 2020 8:33 pm
theorist wrote: Sat Feb 08, 2020 7:48 pm There seems to be some sentiment among some experts that central banks “won’t let” a real crash (reducing equity values for a significant period) happen. I’ve heard this in several financial podcasts. This seems like a dangerous notion.
Really? That is uncomfortably reminiscent of December, 1929, in which rumors spread of something called "organized buying support."
Seeing these comments from before the March pandemic downturn is interesting. As a result of the subsequent recovery, I think I'm seeing this sentiment expressed more and more often; perhaps daily in at least one thread on this forum.

I always appreciate nisiprius calling out the ways that various entities push us to take on more risk.
guyinlaw
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by guyinlaw »

PV link below of retirement in the year 2000 (probably the worst year in recent times) with $1M, $2k withdraw/month. comparison of 60/40, 75/25 and 90/10

US TSM and BND retirement in the year 2000

Code: Select all

Withdrawing 2k/month(2.4% rate no adjustment)
Allocation  Initial   Final Balance	
60/40	$1,000,000	$2,074,863 
75/25	$1,000,000	$2,027,061 
90/10	$1,000,000	$1,911,347 
Withdrawing 5k/month (6% rate no adjustment)
Allocation  Initial   Final Balance	
60/40	$1,000,000	runs out in 2018
75/25	$1,000,000	runs out in 2016
90/10	$1,000,000	runs out in 2014
3 fund porfolio (US, Int and BND) retirement in the year 2000

Code: Select all

Withdrawing 2k/month
Portfolio  Balance	Final Balance
60/40	$1,000,000	$1,835,348
75/25	$1,000,000	$1,730,489
90/10	$1,000,000	$1,569,545 
Michael Kitces on Retirement Research - Rational Reminder Podcast
In the first section of the show, we shoot our questions about retirement planning Michael’s way, exploring sequence of returns risk and the implications it presents for spending and portfolio management through retirement. Michael weighs in on three approaches to variable spending, why people can do what they love and still retire well, and his research on the ‘rising equity glidepath’.
I didn't realize this has been discussed quite extensively here. Kitces discusses the approaches
- Change your portfolio during retirement - Has anyone been increasing equity allocation through retirement?
- Variable spending - 3 approaches - tighten belt when portfolio down-spend conservatively with raises), Guard rails and small/permanents cuts as needed.
Time is your friend; impulse is your enemy. - John C. Bogle
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willthrill81
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by willthrill81 »

From a safe withdrawal rate perspective, 75/25 has been on the upper end of the range with regard to stocks that historically supported a 4% safe withdrawal rate. Much higher than that, and the SWR was lower than 4%. That's just history of course, and I don't think that the 100+ years of data that we have are enough for us to make anything remotely resembling definitive conclusions on the future viability of 60/40 vs. 75/25.

I do suspect that 75/25 will result in more favorable outcomes for retirees than will 60/40, but this assumes that retirees can stomach the volatility. That said, I'm not convinced that 75/25 will result in significantly different behavioral outcomes than 60/40 for most people. But perhaps it would for some. It pays to know yourself.
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LeeMKE
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by LeeMKE »

Humph.

The cost of using this approach (investing in his funds) hasn't been mentioned. That haircut would give me pause.

I moved to 60/40 for my sequence of returns risk period. Once I finish this critical period, I plan to glide to higher equities (maybe slowly glide back to the 90/10 that I held during my savings decades) as per the analysis offered by Micheal Kitces and Wade Pfau.
https://www.kitces.com/blog/should-equi ... ly-better/
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willthrill81
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by willthrill81 »

LeeMKE wrote: Tue Sep 22, 2020 9:21 pm Humph.

The cost of using this approach (investing in his funds) hasn't been mentioned. That haircut would give me pause.

I moved to 60/40 for my sequence of returns risk period. Once I finish this critical period, I plan to glide to higher equities (maybe slowly glide back to the 90/10 that I held during my savings decades) as per the analysis offered by Micheal Kitces and Wade Pfau.
https://www.kitces.com/blog/should-equi ... ly-better/
Just so you are aware, subsequent research has found that there wasn't anything significant about the reverse glidepath approach originally advocated by Kitces and Pfau. Even Kitces' own blog post showed only a tiny theoretical improvement with it over a fixed AA. There are several threads discussing this.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
LeeMKE
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by LeeMKE »

Just so you are aware, subsequent research has found that there wasn't anything significant about the reverse glidepath approach originally advocated by Kitces and Pfau. Even Kitces' own blog post showed only a tiny theoretical improvement with it over a fixed AA. There are several threads discussing this.
Thank you. No, I wasn't aware. I'll search for those threads!
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quisp65
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by quisp65 »

I wonder how this allocation percentage changes balancing views? I partly rationalized going higher equity by one way balancing and going for a larger pot of buy & hold. However I think I would feel safe buying more equity at 40% drop and maybe even 30%, but have not decided on that part of my plan. I suspect we may be in for some longer bear markets and don't like playing with the little of fixed income I have, though I should have something figured out so I don't jump without a plan. I assume Buffett's wife plan of 90/10 is one way balance but 75/25 isn't the same thing as 90/10.
Last edited by quisp65 on Wed Sep 23, 2020 9:51 am, edited 1 time in total.
Plan: 75/25 stock index/cash investments, one-way balance market highs, can lower expenses easily by 1/3rd
azanon
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by azanon »

I find a debate of 60/40 vs 75/25 for retirement interesting, given the fairly recent history of the “failure” of the managed payout fund that was just 55/45, with that failure being because it was launched in 2008 and those payments being largely from principal due to it rapidly falling while paying monthly drawdowns. What’s that saying - those who fail to heed history are doomed to repeat it? (Paraphrase). Yes it started at 5% drawdown, but they adjusted it to 4%. I guess my point is, no one concluded that the problem was it wasn’t aggressive enough.
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by YRT70 »

LeeMKE wrote: Tue Sep 22, 2020 9:48 pm
Just so you are aware, subsequent research has found that there wasn't anything significant about the reverse glidepath approach originally advocated by Kitces and Pfau. Even Kitces' own blog post showed only a tiny theoretical improvement with it over a fixed AA. There are several threads discussing this.
Thank you. No, I wasn't aware. I'll search for those threads!
Just to let you know, ERN has published some research that made a rising equity glide path look very attractive to me personally. This piece was written for early retirees. You'll find it if you search for it. And I listened to a recent Kitces podcast a couple of weeks ago. To me it didn't seem like his ideas about rising equity glide paths have changed.

And as mentioned many threads have been posted about this. I'm personally not interested in redoing these discussions.
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Re: Professor Jeremy Siegel says 75/25 in retirement

Post by Dottie57 »

Broken Man 1999 wrote: Sat Feb 08, 2020 7:09 pm
FBN2014 wrote: Sat Feb 08, 2020 6:51 pm Does his recommendation make any sense?

https://www.cnbc.com/2020/02/08/wharton ... ymore.html
From the link:

Dividends on stocks are going to be the new bond

"....The Siegel-WisdomTree funds will try to solve for that problem by offering low-cost, high-yield investment strategies that highlight one of Siegel’s main arguments from “Stocks for the Long Run”: that stocks may be subject to volatility in the short term, but ultimately have less long-term volatility when compared with bonds...."

I don't like that strategy at all. And, the good professor should know many bond holders, including myself, do not look for income streams from bonds as being the main reason we might hold bonds. The paltry sums are appreciated, but I don't hold bonds for the income stream. Rather, I hold bonds as a safer refuge when the market goes to heck in a handbasket. And, not just any old bond, as I prefer US debt obligations.

Perhaps Siegal's increased risk ploy will play in some places, but frankly if I wanted to juice my income I could have added Vanguard's dividend focused funds long ago.

Not interested at all.

Broken Man 1999
+1

I hold bonds for the same reason.
Day9
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by Day9 »

+2

The response to historically low rates and high valuations is not to reach for yield nor even to increase your stock allocation but to save more and work longer. But you cannot sell books with that advice.

I realize my advice is for people in the accumulation stage. People who depleted their human capital cannot save more and work longer. Hopefully they can reduce their spending. If close to 100% of their spending is already on "needs" and not "wants" then that is a dire situation and maybe then increasing ones stock allocation to match one's need to take risk is appropriate.
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by Leesbro63 »

Day9 wrote: Wed Sep 23, 2020 10:37 am +2

The response to historically low rates and high valuations is not to reach for yield nor even to increase your stock allocation but to save more and work longer. But you cannot sell books with that advice.

I realize my advice is for people in the accumulation stage. People who depleted their human capital cannot save more and work longer. Hopefully they can reduce their spending. If close to 100% of their spending is already on "needs" and not "wants" then that is a dire situation and maybe then increasing ones stock allocation to match one's need to take risk is appropriate.
+3. That being said, most (many?) Bogleheads ALREADY have optimized working and saving to the max.
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by Always passive »

nisiprius wrote: Sat Feb 08, 2020 8:10 pm It's surprisingly difficult to find a real-world example of a time period when 60/40 would have been the tangent portfolio. 1978-2018, and assuming long-term bonds, comes close. I'm going to tweak the parameters just a bit to get a 60/40 optimum in order to illustrate my point.

We'll keep the real values for standard deviations and correlation, but retune returns to favor stock just a bit. Specifically:
We will assume returns 13% from stocks, 8.1% from bonds, and 5% from T-bills. (The actual numbers were 12.66%, 9.011%, and 4.559%).

For this set of parameters, the optimum allocation would have been 60/40.

Image

Now, suppose someone suggests that the future will be more pessimistic for all three asset classes, stocks, bonds and bills alike. To be specific, suppose that their returns will all be 2% less:

11% from stocks, 6.1% from bonds, and 3% from T-bills.

The optimum allocation for stocks doesn't change. Everything on the graph just slides down by 2%, and the optimum allocation continues to be 60/40.

Image

Now, of course, if we assume that (say) the returns from bonds decrease while the returns from stocks stay the same or increase, then, sure, the optimum stock allocation will increase. But most prognosticators seem to be expecting everything to have lower return.

Other things being equal, if all assets have lower returns, that isn't a reason to shift asset allocation toward riskier assets.

The tangent portfolio doesn't move unless you predict that asset class returns will change in relation to each other.

But, what about "how is that going to give you enough income?" How does that factor in? Well, there's a very strong hidden assumption here.

If the risk-adjusted return of everything is going to be worse than before, then things are just going to suck. There isn't any easy way out (and we should be very skeptical of people who pop up saying there is). But we have a choice of ways to react. Siegel is implicitly saying that when things get worse, our risk tolerance rises and we are able to take on more risk. That is, he is saying that "enough" income is imperative, we should insist on holding return constant, and therefore we must accept more risk. That is not an objective, rational conclusion; that is a statement that is appropriate for people who like risk.

We can just as well say "I know what my risk tolerance is, I'm at it now, and I see no reason to expect it to increase. Instead of taking on more risk on order to hold "expected return" constant, I will choose to maintain the same asset allocation, hold risk constant, and accept lower income.

Siegel is assuming that a reduction in income is an intolerable pain, but an increase in risk is perfectly acceptable. That may well be true for some people, but not for everyone.

If the pain of lower income is worse than the pain of having one's life savings at high risk, then we should increase stock allocation. But if the pain of having one's life savings at high risk is worse than the pain of lower income, then we shouldn't.

The idea that one's risk tolerance increases in bad economic times doesn't resonate with me.
Very good points!!$
mikejuss
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by mikejuss »

Leesbro63 wrote: Wed Sep 23, 2020 12:00 pm
Day9 wrote: Wed Sep 23, 2020 10:37 am +2

The response to historically low rates and high valuations is not to reach for yield nor even to increase your stock allocation but to save more and work longer. But you cannot sell books with that advice.

I realize my advice is for people in the accumulation stage. People who depleted their human capital cannot save more and work longer. Hopefully they can reduce their spending. If close to 100% of their spending is already on "needs" and not "wants" then that is a dire situation and maybe then increasing ones stock allocation to match one's need to take risk is appropriate.
+3. That being said, most (many?) Bogleheads ALREADY have optimized working and saving to the max.
+4. Unfortunately, this forum (wisely) does not permit a debate regarding the possible solutions to this problem, which would draw us into choppy political waters. But you've identified it exactly.
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Munir
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by Munir »

I'm a retiree in the distribution phase and have stayed at 30:70 ratio of equities:fixed income. I wish the returns of fixed income were higher but I can adjust to that much more easily than to a higher risk and higher equity position portfolio which would give me sleepless nights.
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by singlewhip2030 »

A possible contrarian view:

Siegel May have a vested interest in peddling stocks, but is he less credible than Warren Buffett? Buffett suggests a 90/10 portfolio.

What we do know is the fed has determined to 1) keep interest rates at slightly above zero until 2) there are signs of strong inflation. I don’t think that’s a politics view, but rather actionable fact based on their open communication about intentions.

In both scenarios stocks provide more value in comparison to bonds historically.

I also believe many underweight the impact of ever increasing life expectancy.

Many believe a couch portfolio of say, 50/50 provides stability in terms of risk and lesser (bonds) returns, but the risk in the near future is risk and no or negative returns.
Day9
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by Day9 »

singlewhip2030 wrote: Wed Sep 23, 2020 1:13 pm A possible contrarian view:

Siegel May have a vested interest in peddling stocks, but is he less credible than Warren Buffett? Buffett suggests a 90/10 portfolio.
...
Isn't the context for Buffet's "90/10" his fortune he will leave to his wife? 90% S&P 500 index fund, like the one from Vangurad, 10% Treasury Bills. The 10% Treasury Bills alone would be an astronomical amount.

Sorry if I missed it, did he also recommend 90/10 for a normal person?
I'm just a fan of the person I got my user name from
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Munir
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by Munir »

Buffet has 90% equities for himself but I have never seen him quoted as advising it for others. Siegel advises 75% equities, and some posters are considering higher allocations to equities. What has happened to Bogle's advice to retirees of having your age in bonds (or some variation on that such as your age -10 or -5 ?) Many on this forum, and appropriately so, quote Bogle often but I rarely see his age in bonds advice showing up anymore. What gives?
palanzo
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by palanzo »

Day9 wrote: Wed Sep 23, 2020 1:21 pm
singlewhip2030 wrote: Wed Sep 23, 2020 1:13 pm A possible contrarian view:

Siegel May have a vested interest in peddling stocks, but is he less credible than Warren Buffett? Buffett suggests a 90/10 portfolio.
...
Isn't the context for Buffet's "90/10" his fortune he will leave to his wife? 90% S&P 500 index fund, like the one from Vangurad, 10% Treasury Bills. The 10% Treasury Bills alone would be an astronomical amount.

Sorry if I missed it, did he also recommend 90/10 for a normal person?
No he did not. Also he is not leaving 72 Billion to his wife.
Wanderingwheelz
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Re: [Professor Jeremy Siegel says 75/25 in retirement]

Post by Wanderingwheelz »

Pierre Delecto wrote: Sun Feb 09, 2020 11:43 am
DB2 wrote: Sun Feb 09, 2020 11:38 am It's difficult to find anything of value on CNBC. At the end of the day, it's practically owned by financial institutions who are always going to push "stocks". I do turn it on occasionally for sheer entertainment purposes. But, just the other day, a couple of guests were saying they were 100% equities.
Nothing wrong with 100 percent equities — for a slice of investor population. Richest people I know (Ultra net worth) didn’t get there owning bonds or treasuries.
You’re right. They either inherited it or they had very high earned incomes. Otherwise, we’re taking about a very, very old person who started investing 70 years earlier, and there aren’t too many of those people.
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