Retirement day one, have $1M and are drawing a $40K income (4% SWR).What are you going to do when stocks drop 50%?
End of year one and stocks have dropped 50%, effective SWR relative to the portfolio value at that time is around 8%.
That is as equally likely to succeed/fail as having started a year earlier.
When you average in over many years, average out over many years, that tends to all smooth out. A 50% drop might be considered as only being a issue if you lump all-out at that time. Buy and hold is no different to the cost-less lumping in/out each and every day. The risk is primarily that of fear/discomfort, capitulating at lows to instead deposit/invest elsewhere. Potentially the disinterested who don't monitor/change their portfolio are more inclined to succeed than those that closely monitor their portfolio and change things around. "Don't do something, stand there!" -- J Bogle
Statistics: Posted by seajay — Sun Jun 30, 2024 7:28 am — Replies 15 — Views 2046