Larry Swedroe: Does The Bucket Approach Destroy Wealth?

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siamond
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Re: Larry Swedroe: Does The Bucket Approach Destroy Wealth?

Post by siamond » Thu Jan 10, 2019 11:53 am

Scandinavian wrote:
Thu Jan 10, 2019 5:49 am
Siamond, I recall reading some of your analysis of a high equity allocation over longer periods. I specifically remember a graph showing how when equities has outperformed, they have done so by a lot. When they have underperformed, they have done so by very little. If you could point me to the thread where I read this, I would be grateful!
It was probably this post. Thanks for your interest.

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2pedals
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Re: Larry Swedroe: Does The Bucket Approach Destroy Wealth?

Post by 2pedals » Thu Jan 10, 2019 12:05 pm

Interesting study but I must be missing something. The book by McClung "Living off Your Money" suggested to use prime harvesting rather than a static asset allocation. Also variable withdrawal strategies such as Extended Mortality Updating (EM and ECM) were suggested rather than evaluating a SWR for success or failure.
Last edited by 2pedals on Thu Jan 10, 2019 12:26 pm, edited 1 time in total.

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willthrill81
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Re: Larry Swedroe: Does The Bucket Approach Destroy Wealth?

Post by willthrill81 » Thu Jan 10, 2019 12:07 pm

nedsaid wrote:
Thu Jan 10, 2019 11:23 am
willthrill81 wrote:
Wed Jan 09, 2019 11:17 am
Thanks for sharing. I very much doubt that you were alone in your fear. That's why I believe that the bucket approach may be preferable to some. If it enables them to avoid panic selling, then it's probably better than a fixed AA.
There is also the Taylor Larimore withdrawal method. In good years, splurge a bit and in bad years cut back. Sometimes I think we way overthink this stuff.
Of course! That's at least half of what we do around here. But it would be really boring otherwise. :wink:
“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

bgf
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Re: Larry Swedroe: Does The Bucket Approach Destroy Wealth?

Post by bgf » Thu Jan 10, 2019 12:34 pm

Always passive wrote:
Thu Jan 10, 2019 11:40 am
I think that the strategy that makes the most sense to me is the one offered by Zvi Bodie some years back. Build a TIPS ladder to cover the necessary retirement expenses with the rest going to equities.
I do not do that exactly, but keep a 10 year ladder.
It may not be the most efficient system if performance is the target, but it gives the retiree peace of mind.
BTW, I do not think that performance should be the goal for retirees; rather, making sure that the retiree dies before running out of money.
in other words, it is the debate between optimization v. barbell.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"

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Sandtrap
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Re: Larry Swedroe: Does The Bucket Approach Destroy Wealth?

Post by Sandtrap » Thu Jan 10, 2019 4:21 pm

willthrill81 wrote:
Thu Jan 10, 2019 12:07 pm
nedsaid wrote:
Thu Jan 10, 2019 11:23 am
willthrill81 wrote:
Wed Jan 09, 2019 11:17 am
Thanks for sharing. I very much doubt that you were alone in your fear. That's why I believe that the bucket approach may be preferable to some. If it enables them to avoid panic selling, then it's probably better than a fixed AA.
There is also the Taylor Larimore withdrawal method. In good years, splurge a bit and in bad years cut back. Sometimes I think we way overthink this stuff.
Of course! That's at least half of what we do around here. But it would be really boring otherwise. :wink:
+1
And, additionally . . . bad year > splurge a bit less but still splurge (just because it feels good) . . . good year > put bit aside for the previous splurge that felt good :shock:
j
Wiki Bogleheads Wiki: Everything You Need to Know

Scandinavian
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Re: Larry Swedroe: Does The Bucket Approach Destroy Wealth?

Post by Scandinavian » Thu Jan 10, 2019 4:28 pm

siamond wrote:
Thu Jan 10, 2019 11:53 am
Scandinavian wrote:
Thu Jan 10, 2019 5:49 am
Siamond, I recall reading some of your analysis of a high equity allocation over longer periods. I specifically remember a graph showing how when equities has outperformed, they have done so by a lot. When they have underperformed, they have done so by very little. If you could point me to the thread where I read this, I would be grateful!
It was probably this post. Thanks for your interest.
Many thanks!

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willthrill81
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Re: Larry Swedroe: Does The Bucket Approach Destroy Wealth?

Post by willthrill81 » Thu Jan 10, 2019 4:56 pm

Sandtrap wrote:
Thu Jan 10, 2019 4:21 pm
willthrill81 wrote:
Thu Jan 10, 2019 12:07 pm
nedsaid wrote:
Thu Jan 10, 2019 11:23 am
willthrill81 wrote:
Wed Jan 09, 2019 11:17 am
Thanks for sharing. I very much doubt that you were alone in your fear. That's why I believe that the bucket approach may be preferable to some. If it enables them to avoid panic selling, then it's probably better than a fixed AA.
There is also the Taylor Larimore withdrawal method. In good years, splurge a bit and in bad years cut back. Sometimes I think we way overthink this stuff.
Of course! That's at least half of what we do around here. But it would be really boring otherwise. :wink:
+1
And, additionally . . . bad year > splurge a bit less but still splurge (just because it feels good) . . . good year > put bit aside for the previous splurge that felt good :shock:
j
As HomerJ has put it many times, the difference between a good year and bad year for most Boglehead retirees is taking two vacations a year instead of four.
“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

Merrilee
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Re: Larry Swedroe: Does The Bucket Approach Destroy Wealth?

Post by Merrilee » Sun Jan 27, 2019 1:23 pm

Does this research change how an investor might think about "winning the game"?

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willthrill81
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Re: Larry Swedroe: Does The Bucket Approach Destroy Wealth?

Post by willthrill81 » Sun Jan 27, 2019 1:46 pm

Merrilee wrote:
Sun Jan 27, 2019 1:23 pm
Does this research change how an investor might think about "winning the game"?
I'm not sure how. Personally, I have disdain for the term "winning the game." You don't know that you've 'won the game' (i.e. didn't go broke) until you're dead.
“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

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