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  • FIRST POST
    • TBC15
    • By TBC15 31st Aug 17, 11:30 AM
    • 226Posts
    • 79Thanks
    TBC15
    The 4% Rule
    • #1
    • 31st Aug 17, 11:30 AM
    The 4% Rule 31st Aug 17 at 11:30 AM
    I came across this http://www.madfientist.com/michael-kitces-interview/ some may find useful.

    It’s American centric but still worth a listen.

    Makes a change from reading about the subject.
    Last edited by TBC15; 31-08-2017 at 11:55 AM. Reason: American centric
Page 6
    • IanSt
    • By IanSt 12th Sep 17, 9:09 AM
    • 113 Posts
    • 70 Thanks
    IanSt
    Hmm. This only works if you have average returns of 7% or above. If you used 5% - which historically is much more representative of the long term real returns on equities - then the 30 to 70 person ends up with 56% more than the 21 to 30 and more than double the 0 to 2.
    Originally posted by Triumph13
    One of the reasons why l've always increased my yearly pension contributions by at least inflation.
    • ams25
    • By ams25 12th Sep 17, 11:10 AM
    • 94 Posts
    • 75 Thanks
    ams25
    https://earlyretirementnow.com/2017/03/15/the-ultimate-guide-to-safe-withdrawal-rates-part-11-criteria/

    Interesting article scoring the 4% rule vs others.... the best appears to be a CAPE based rule.

    You can also see in depth articles on all the common withdrawal approaches. Key message as ever is these rules are guidelines to be used with flexibility etc.

    After readling all this I am sticking with 3% net of fees for now as this gives us enough..but nice to feel that unless we have a horrible period of returns there could be room for upgrades.
    • TBC15
    • By TBC15 26th Sep 17, 6:45 PM
    • 226 Posts
    • 79 Thanks
    TBC15
    Great British Invest off or Passive V Active

    For those who are curious to compare their Passive/ Active investment strategies I propose to start a new thread 29th with monthly updates (Bottom lines only) if there is sufficient interest.

    Portfolios rebased to £100000 on the last active day of trading on the 29th Sept and constituents followable on Trustnet .

    Ideally the portfolios should mirror the investor’s actual holdings as near as possible with Trustnet. This is not really a fantasy league.

    TBC15 Active £100000
    £3,700 AXA Framlington Global Technology Z Acc
    £5,100 Fidelity UK Smaller Companies W Acc
    £9,700 First State Greater China Growth B GBP Acc
    £35,200 Fundsmith Equity T Acc
    £1,100 Jupiter India I Acc
    £10,500 L&G Global Technology Index Trust I Acc
    £10,800 Liontrust UK Smaller Companies I Inc
    £14,100 Slater Growth P Acc
    £2,100 Stewart Investors Global Emerging Markets Leaders B GBP Acc
    £7,700 Stewart Investors Indian Subcontinent B GBP

    Initial disclosure of constituents for transparency.

    Monthly updates (Bottom Line) to be provided by participants.

    Anyone up for it, this could be interesting and tedious.
    Last edited by TBC15; 26-09-2017 at 6:48 PM. Reason: Grammar
    • AnotherJoe
    • By AnotherJoe 26th Sep 17, 7:07 PM
    • 7,562 Posts
    • 8,166 Thanks
    AnotherJoe
    The flaw in your plan is twofold.
    1. You are not comparing active with passive. You are comparing that particular blend of active (why that mix?) with some ?which? passive.
    2. See point 1.
    • TBC15
    • By TBC15 26th Sep 17, 7:13 PM
    • 226 Posts
    • 79 Thanks
    TBC15
    1. It’s what I’ve got
    2. Do you want to play or not?
    3. If the secret of my success is my 10.5% dalliance with the dark side of teck I’ll freely admit it.
    Last edited by TBC15; 26-09-2017 at 7:38 PM. Reason: item 3
    • BLB53
    • By BLB53 26th Sep 17, 7:30 PM
    • 1,151 Posts
    • 930 Thanks
    BLB53
    I hold Vanguard Lifestrategy 60 in my sipp and would be interested to compare performance against an active portfolio but would need to be long term.
    If you choose index funds you can never outperform the market.
    If you choose managed funds there's a high probability you will underperform index funds.
    • TBC15
    • By TBC15 26th Sep 17, 7:44 PM
    • 226 Posts
    • 79 Thanks
    TBC15
    Long term that’s where the tedious comes in, if you only have one holding I’ll include you and do the updates in if you want. But if 2017 is anything to go by its not going to look pretty.
    • BLB53
    • By BLB53 26th Sep 17, 8:12 PM
    • 1,151 Posts
    • 930 Thanks
    BLB53
    But if 2017 is anything to go by its not going to look pretty.
    Yes but see how things look after the impending downturn...

    Maybe now a good time to start off a new thread?
    If you choose index funds you can never outperform the market.
    If you choose managed funds there's a high probability you will underperform index funds.
    • TBC15
    • By TBC15 26th Sep 17, 8:35 PM
    • 226 Posts
    • 79 Thanks
    TBC15
    So can I count you in?
    • Bravepants
    • By Bravepants 26th Sep 17, 10:41 PM
    • 272 Posts
    • 316 Thanks
    Bravepants
    I hold Vanguard Lifestrategy 60 in my sipp and would be interested to compare performance against an active portfolio but would need to be long term.
    Originally posted by BLB53
    Is that the only product you hold?

    I hold VLS60 with a global equity fund in my ISA to make 70/30 equity/bond mix. But I intend to shift fully to VLS60 in 6 years or so when I get to 55. With my AVCs I aim to transfer to VLS60 in a SIPP ready for drawdown. I figure one simple product will do me.
    • BLB53
    • By BLB53 26th Sep 17, 11:48 PM
    • 1,151 Posts
    • 930 Thanks
    BLB53
    So can I count you in?
    Yep you can count me in.
    If you choose index funds you can never outperform the market.
    If you choose managed funds there's a high probability you will underperform index funds.
    • TBC15
    • By TBC15 27th Sep 17, 6:55 AM
    • 226 Posts
    • 79 Thanks
    TBC15
    100% Lifestrategy 60?
    • TBC15
    • By TBC15 27th Sep 17, 7:09 AM
    • 226 Posts
    • 79 Thanks
    TBC15
    Ams25, bostonerimus are you both still game?
    • stoozie1
    • By stoozie1 27th Sep 17, 7:22 AM
    • 363 Posts
    • 208 Thanks
    stoozie1
    How will people record what is growth and what is their own injection of capital by buying more funds?
    • TBC15
    • By TBC15 27th Sep 17, 8:10 AM
    • 226 Posts
    • 79 Thanks
    TBC15
    Fixed start value of £100000, no extra funds.

    It really should mirror what you hold be you a passive or active investor.
    • Linton
    • By Linton 27th Sep 17, 9:10 AM
    • 8,463 Posts
    • 8,390 Thanks
    Linton
    You may find the following post of interest - it dates from December 2013.

    I will stick my neck out and pick some of the ones I hold to be put against Vanguard GLS 100.

    Old Mutual UK Smaller Companies
    Framlington Health
    Blackrock European Dynamic
    Henderson Global Tech
    F&C US Smaller companies
    First State Asia Pacific

    Make the same investment in each, so a broad geographic spread with a bias towards the US.
    Originally posted by Linton
    Annual Returns: previous years 0-12m, 13-24,25-36, 37-48 (if the portfolio had been running for 4 full years)

    Linton: 15.7%, 25.4%, 9.7%, 11.3% - 4 year total: 77%
    VLS100: 13.9%, 26.2%, 0.6%, 8.2% - 4 year total: 56%
    FTSE World Index:15.0%, 29.9%, 0.8%, 10.1% - 4 year total: 66%

    Note that the Linton data was based on the old bundled charge funds.

    I will put in one based on my current growth portfolio holdings.
    • TBC15
    • By TBC15 27th Sep 17, 9:51 AM
    • 226 Posts
    • 79 Thanks
    TBC15
    Linton, nice to have you on board.
  • jamesd
    earlyretirementnow ... in depth articles on all the common withdrawal approaches.
    Originally posted by ams25
    In depth but wrong, particularly about Guyton-Klinger. Seeing how badly they seem to understand that and don't actually use the Guyton-Klinger rules in calculations they label as Guyton-Klinger I suggest caution with anything they write.

    What I suggest is real Guyton-Klinger modified by Guyton's sequence of returns risk reduction, which varies asset allocation based on cyclically adjusted price/earnings.
    • AnotherJoe
    • By AnotherJoe 27th Sep 17, 2:57 PM
    • 7,562 Posts
    • 8,166 Thanks
    AnotherJoe
    1. It’s what I’ve got
    2. Do you want to play or not?
    3. If the secret of my success is my 10.5% dalliance with the dark side of teck I’ll freely admit it.
    Originally posted by TBC15
    1. Not sure I understand that. Do you mean that is your actual portfolio?
    2. No because only a study over whole stock market over decades means anything.
    Or to put it another way, the plural of "anecdote" is not "data"
    3. Maybe I've simply misunderstood your post.
    • TBC15
    • By TBC15 27th Sep 17, 4:06 PM
    • 226 Posts
    • 79 Thanks
    TBC15
    1. Yes ratios rebased to £100000
    2. OK
    3. Possibly
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