Whether that's the most reasonable forecast is a highly debatable issue, but that's for another thread.countmein wrote: ↑Thu Sep 05, 2019 4:44 pmYes, absolutely, that's the most reasonable forecast. Also I edited the above to include the 'worst years first' parameter, which really brings the SWR down even further (1.4% or less). Personally I'm willing to gamble a little bit on that one and will keep it near the 2.0 range but IMO SWRs in the 3+ range for very long horizons are just reckless.willthrill81 wrote: ↑Thu Sep 05, 2019 4:39 pmSo you really believe that bonds will have a 0% real return for the next 50 years?countmein wrote: ↑Thu Sep 05, 2019 4:35 pmI was using their stated 4.5% from the podcast and subtracted 2% for inflation. Could use Rick's old 30 year forecast but you've got to set the bond side to 0 real. Stocks are 5% so that's 3% real for the portfolio. The PV model at 3% real expected return gives you an SWR of 2.0.willthrill81 wrote: ↑Thu Sep 05, 2019 4:19 pm
https://www.etf.com/sections/index-inve ... nopaging=1
Well, you were right. My respect for Rick has gone down another notch.
I don't see how you were getting 2.5% real returns expected from a 60/40 portfolio. Rick is forecasting 1.9% real for 10 year Treasuries and 5% real for U.S. large-cap and higher returns for all other equity asset classes. That would work out to at least a 3.76% expected real return for a 60/40 AA, which is a lot better than 2.5%.
Out of curiosity, why would you hold bonds over such a long period of time if you believed their real return to be 0%? If I thought that bonds would have 0% real returns over the next 50 years, I wouldn't put a dime in them and would seek alternatives such as rental properties or even 100% stock portfolios.