Timing the market

MK62

I'm fully aware of the benefits of diversification, but you don't have to a have to diversify into every sector, and with broadly market cap weighting, to achieve that....and there is a counter argument with over-diversification too, but that's another debate.
Asset allocation before the fact is a matter of opinion.....it's perfectly valid to go with a global cap weighted equity index tracker, but that does not invalidate other allocation models which deviate from that. You mentioned the US and tech sectors earlier, and while there's no denying they have been excellent performers, there was still money made outside those sectors.....a "wealth preservation" fund's main aim isn't to maximise returns, period, it's to maximise returns within a given risk range, and if that means forgoing investment in regions or sectors the manager deems too risky at the time, then that's what he/she will do. You might view that as taking bets, fair enough, but if so, that's true, to a varying degree, for almost every fund out there.

Linton

Deleted_User said:

AlanP_2 said:

Deleted_User said:

AlanP_2 said:

Deleted_User said:

To me, following market cap weightings is fairly pointless unless you simply want to follow the market....in which case just buy an index fund and be done with it. If you wanted to avoid the more volatile sectors of a market, I see nothing wrong with that in itself - you might forego larger gains by doing so, but at the same time avoid larger drops.....pretty much what I'd expect a fund, with the main aim of wealth preservation, to do......I don't see how doing so would necessarily increase risk.

You don’t need to follow the exact cap weightings but cutting out sectors and regions equates to taking bets.  

You don’t know what you will forego and avoid.  Someone avoiding US and Technology in 2010 would have foregone all growth in the next decade.  Could have been worse.  Diversification is the “free lunch”.  By cutting out whole sectors you are reducing diversification and increasing  risk. 

Risk of what?

Risk of losing money over a meaningful period of time. 

That can have different meanings dependent upon context. Real loss of money i.e. pot goes down in value or loss compared to ANO selection of assets? 

Also, it is just one risk, and may not be the one the individual wants to mitigate.

Take for example someone who wants to buy a property in 4 years time and is building a deposit.

Using your logic they should invest in global equities as per market cap, and maybe have some bonds, precious metal, commercial property, infrastructure etc. funds as well to make sure they haven't cut out any whole sectors.

They then have a real risk that, if markets fall, they could miss their target and have to delay their house purchase. They could mitigate this risk by keeping it all in cash accepting that they are likely to lose money over a meaningful period of time (to inflation) but have a much greater chance of hitting their target.

Your approach does not allow for individual context

That’s not my logic.  We are in a pension forum. Your scenario is very different. 

Everything you are saying especially about diversification relates to the long term.  Yes for long term growth WP funds are not appropriate except possibly for someone with strongh risk aversion where perceived safety is more important than total return.

However in retirement the short and medium term are equally important.  One has to eat whilst awaiting for the markets to return to their long term trends.  The short term can satisfactorily be managed with cash.  The difficult one is the medium term, say time-frames of  5-10 or possibly a bit more years.  In this medium term cash becomes more of a risk because of inflation whilst medium term timeframes are too short for equity volatility not to be a concern.  Safe UK Bonds are currently out of the picture.  It is here where WP funds really are the only option that offers a reasonable hope on past performance of providing a greater than inflation return whilst avoiding major crashes.  It is reassuring that unlike many other funds this matches their stated objectives.

What is your proposal for managing the medium term?

Audaxer

Linton said:

Deleted_User said:

AlanP_2 said:

Deleted_User said:

AlanP_2 said:

Deleted_User said:

To me, following market cap weightings is fairly pointless unless you simply want to follow the market....in which case just buy an index fund and be done with it. If you wanted to avoid the more volatile sectors of a market, I see nothing wrong with that in itself - you might forego larger gains by doing so, but at the same time avoid larger drops.....pretty much what I'd expect a fund, with the main aim of wealth preservation, to do......I don't see how doing so would necessarily increase risk.

You don’t need to follow the exact cap weightings but cutting out sectors and regions equates to taking bets.  

You don’t know what you will forego and avoid.  Someone avoiding US and Technology in 2010 would have foregone all growth in the next decade.  Could have been worse.  Diversification is the “free lunch”.  By cutting out whole sectors you are reducing diversification and increasing  risk. 

Risk of what?

Risk of losing money over a meaningful period of time. 

That can have different meanings dependent upon context. Real loss of money i.e. pot goes down in value or loss compared to ANO selection of assets? 

Also, it is just one risk, and may not be the one the individual wants to mitigate.

Take for example someone who wants to buy a property in 4 years time and is building a deposit.

Using your logic they should invest in global equities as per market cap, and maybe have some bonds, precious metal, commercial property, infrastructure etc. funds as well to make sure they haven't cut out any whole sectors.

They then have a real risk that, if markets fall, they could miss their target and have to delay their house purchase. They could mitigate this risk by keeping it all in cash accepting that they are likely to lose money over a meaningful period of time (to inflation) but have a much greater chance of hitting their target.

Your approach does not allow for individual context

That’s not my logic.  We are in a pension forum. Your scenario is very different. 

Safe UK Bonds are currently out of the picture.  It is here where WP funds really are the only option that offers a reasonable hope on past performance of providing a greater than inflation return whilst avoiding major crashes.  It is reassuring that unlike many other funds this matches their stated objectives.

I thought WP funds/ITs like CGT held a lot of safe UK bonds?

Linton

Audaxer said:

Linton said:

Deleted_User said:

AlanP_2 said:

Deleted_User said:

AlanP_2 said:

Deleted_User said:

To me, following market cap weightings is fairly pointless unless you simply want to follow the market....in which case just buy an index fund and be done with it. If you wanted to avoid the more volatile sectors of a market, I see nothing wrong with that in itself - you might forego larger gains by doing so, but at the same time avoid larger drops.....pretty much what I'd expect a fund, with the main aim of wealth preservation, to do......I don't see how doing so would necessarily increase risk.

You don’t need to follow the exact cap weightings but cutting out sectors and regions equates to taking bets.  

You don’t know what you will forego and avoid.  Someone avoiding US and Technology in 2010 would have foregone all growth in the next decade.  Could have been worse.  Diversification is the “free lunch”.  By cutting out whole sectors you are reducing diversification and increasing  risk. 

Risk of what?

Risk of losing money over a meaningful period of time. 

That can have different meanings dependent upon context. Real loss of money i.e. pot goes down in value or loss compared to ANO selection of assets? 

Also, it is just one risk, and may not be the one the individual wants to mitigate.

Take for example someone who wants to buy a property in 4 years time and is building a deposit.

Using your logic they should invest in global equities as per market cap, and maybe have some bonds, precious metal, commercial property, infrastructure etc. funds as well to make sure they haven't cut out any whole sectors.

They then have a real risk that, if markets fall, they could miss their target and have to delay their house purchase. They could mitigate this risk by keeping it all in cash accepting that they are likely to lose money over a meaningful period of time (to inflation) but have a much greater chance of hitting their target.

Your approach does not allow for individual context

That’s not my logic.  We are in a pension forum. Your scenario is very different. 

Safe UK Bonds are currently out of the picture.  It is here where WP funds really are the only option that offers a reasonable hope on past performance of providing a greater than inflation return whilst avoiding major crashes.  It is reassuring that unlike many other funds this matches their stated objectives.

I thought WP funds/ITs like CGT held a lot of safe UK bonds?

Yes but they are carefully chosen bonds rather than the random assortment you would get in a bond index fund.  In the case of CGT the UK government bond holdings are in very short dated UK gilts (maturity date within 3 years)  which are very low risk.  The longer the time to maturity the greater the risk.  The average for Vanguard's UK Gilt Index fund is 13-14 years (IIRC)

See:https://www.capitalgearingtrust.com/sites/cgt/files/literature/Holdings/CGT_Valuation_5.10.21.pdf

BritishInvestor

Linton said:

Deleted_User said:

AlanP_2 said:

Deleted_User said:

AlanP_2 said:

Deleted_User said:

To me, following market cap weightings is fairly pointless unless you simply want to follow the market....in which case just buy an index fund and be done with it. If you wanted to avoid the more volatile sectors of a market, I see nothing wrong with that in itself - you might forego larger gains by doing so, but at the same time avoid larger drops.....pretty much what I'd expect a fund, with the main aim of wealth preservation, to do......I don't see how doing so would necessarily increase risk.

You don’t need to follow the exact cap weightings but cutting out sectors and regions equates to taking bets.  

You don’t know what you will forego and avoid.  Someone avoiding US and Technology in 2010 would have foregone all growth in the next decade.  Could have been worse.  Diversification is the “free lunch”.  By cutting out whole sectors you are reducing diversification and increasing  risk. 

Risk of what?

Risk of losing money over a meaningful period of time. 

That can have different meanings dependent upon context. Real loss of money i.e. pot goes down in value or loss compared to ANO selection of assets? 

Also, it is just one risk, and may not be the one the individual wants to mitigate.

Take for example someone who wants to buy a property in 4 years time and is building a deposit.

Using your logic they should invest in global equities as per market cap, and maybe have some bonds, precious metal, commercial property, infrastructure etc. funds as well to make sure they haven't cut out any whole sectors.

They then have a real risk that, if markets fall, they could miss their target and have to delay their house purchase. They could mitigate this risk by keeping it all in cash accepting that they are likely to lose money over a meaningful period of time (to inflation) but have a much greater chance of hitting their target.

Your approach does not allow for individual context

That’s not my logic.  We are in a pension forum. Your scenario is very different. 

Everything you are saying especially about diversification relates to the long term.  Yes for long term growth WP funds are not appropriate except possibly for someone with strongh risk aversion where perceived safety is more important than total return.

However in retirement the short and medium term are equally important.  One has to eat whilst awaiting for the markets to return to their long term trends.  The short term can satisfactorily be managed with cash.  The difficult one is the medium term, say time-frames of  5-10 or possibly a bit more years.  In this medium term cash becomes more of a risk because of inflation whilst medium term timeframes are too short for equity volatility not to be a concern.  Safe UK Bonds are currently out of the picture.  It is here where WP funds really are the only option that offers a reasonable hope on past performance of providing a greater than inflation return whilst avoiding major crashes.  It is reassuring that unlike many other funds this matches their stated objectives.

What is your proposal for managing the medium term?

I've just created a rough and ready example - 30 year retirement, zero fees

50% equity - 3.3% SWR
100% - 3.7%

Holding a 100% equity portfolio has (historically) provided a higher SWR than 50% equity. Of course, not many would be happy with a 100% equity portfolio, but equities do tend to give long term inflation protection. I'm not really sure how wealth preservation funds fit into the picture, or why you need to manage short or medium term?

Linton

BritishInvestor said:

Linton said:

Deleted_User said:

AlanP_2 said:

Deleted_User said:

AlanP_2 said:

Deleted_User said:

To me, following market cap weightings is fairly pointless unless you simply want to follow the market....in which case just buy an index fund and be done with it. If you wanted to avoid the more volatile sectors of a market, I see nothing wrong with that in itself - you might forego larger gains by doing so, but at the same time avoid larger drops.....pretty much what I'd expect a fund, with the main aim of wealth preservation, to do......I don't see how doing so would necessarily increase risk.

You don’t need to follow the exact cap weightings but cutting out sectors and regions equates to taking bets.  

You don’t know what you will forego and avoid.  Someone avoiding US and Technology in 2010 would have foregone all growth in the next decade.  Could have been worse.  Diversification is the “free lunch”.  By cutting out whole sectors you are reducing diversification and increasing  risk. 

Risk of what?

Risk of losing money over a meaningful period of time. 

That can have different meanings dependent upon context. Real loss of money i.e. pot goes down in value or loss compared to ANO selection of assets? 

Also, it is just one risk, and may not be the one the individual wants to mitigate.

Take for example someone who wants to buy a property in 4 years time and is building a deposit.

Using your logic they should invest in global equities as per market cap, and maybe have some bonds, precious metal, commercial property, infrastructure etc. funds as well to make sure they haven't cut out any whole sectors.

They then have a real risk that, if markets fall, they could miss their target and have to delay their house purchase. They could mitigate this risk by keeping it all in cash accepting that they are likely to lose money over a meaningful period of time (to inflation) but have a much greater chance of hitting their target.

Your approach does not allow for individual context

That’s not my logic.  We are in a pension forum. Your scenario is very different. 

Everything you are saying especially about diversification relates to the long term.  Yes for long term growth WP funds are not appropriate except possibly for someone with strongh risk aversion where perceived safety is more important than total return.

However in retirement the short and medium term are equally important.  One has to eat whilst awaiting for the markets to return to their long term trends.  The short term can satisfactorily be managed with cash.  The difficult one is the medium term, say time-frames of  5-10 or possibly a bit more years.  In this medium term cash becomes more of a risk because of inflation whilst medium term timeframes are too short for equity volatility not to be a concern.  Safe UK Bonds are currently out of the picture.  It is here where WP funds really are the only option that offers a reasonable hope on past performance of providing a greater than inflation return whilst avoiding major crashes.  It is reassuring that unlike many other funds this matches their stated objectives.

What is your proposal for managing the medium term?

I've just created a rough and ready example - 30 year retirement, zero fees

50% equity - 3.3% SWR
100% - 3.7%

Holding a 100% equity portfolio has (historically) provided a higher SWR than 50% equity. Of course, not many would be happy with a 100% equity portfolio, but equities do tend to give long term inflation protection. I'm not really sure how wealth preservation funds fit into the picture, or why you need to manage short or medium term?

I am not reassured by SWRs.  Never mind the dubious assumption that the future will be similar to the past, nor the fact that their values are completely determined by a very small number of very large effectively random events. More importantly they are based on historic zero total failures over 30 or so years .  I would have worried myself to an early grave long before my investments had dropped to zero.

The advantage I find with short and medium term portfolios is that severe drops in the long term investments can be completely ignored in the knowledge that they dont need to be touched for at least 10 years and probably much longer.  This has the resultant effect that the long term investments can be at a much higher risk level than would otherwise be the case.

So overall the broad % equity vs non-equity allocation may not be very different to say the traditional 60/40 portfolio.  Separating them means that one can set up the detailed allocations to meet the very different objectives and so hopefully achieve a financially stress-free retirement.

BritishInvestor

Linton said:

BritishInvestor said:

Linton said:

Deleted_User said:

AlanP_2 said:

Deleted_User said:

AlanP_2 said:

Deleted_User said:

To me, following market cap weightings is fairly pointless unless you simply want to follow the market....in which case just buy an index fund and be done with it. If you wanted to avoid the more volatile sectors of a market, I see nothing wrong with that in itself - you might forego larger gains by doing so, but at the same time avoid larger drops.....pretty much what I'd expect a fund, with the main aim of wealth preservation, to do......I don't see how doing so would necessarily increase risk.

You don’t need to follow the exact cap weightings but cutting out sectors and regions equates to taking bets.  

You don’t know what you will forego and avoid.  Someone avoiding US and Technology in 2010 would have foregone all growth in the next decade.  Could have been worse.  Diversification is the “free lunch”.  By cutting out whole sectors you are reducing diversification and increasing  risk. 

Risk of what?

Risk of losing money over a meaningful period of time. 

That can have different meanings dependent upon context. Real loss of money i.e. pot goes down in value or loss compared to ANO selection of assets? 

Also, it is just one risk, and may not be the one the individual wants to mitigate.

Take for example someone who wants to buy a property in 4 years time and is building a deposit.

Using your logic they should invest in global equities as per market cap, and maybe have some bonds, precious metal, commercial property, infrastructure etc. funds as well to make sure they haven't cut out any whole sectors.

They then have a real risk that, if markets fall, they could miss their target and have to delay their house purchase. They could mitigate this risk by keeping it all in cash accepting that they are likely to lose money over a meaningful period of time (to inflation) but have a much greater chance of hitting their target.

Your approach does not allow for individual context

That’s not my logic.  We are in a pension forum. Your scenario is very different. 

Everything you are saying especially about diversification relates to the long term.  Yes for long term growth WP funds are not appropriate except possibly for someone with strongh risk aversion where perceived safety is more important than total return.

However in retirement the short and medium term are equally important.  One has to eat whilst awaiting for the markets to return to their long term trends.  The short term can satisfactorily be managed with cash.  The difficult one is the medium term, say time-frames of  5-10 or possibly a bit more years.  In this medium term cash becomes more of a risk because of inflation whilst medium term timeframes are too short for equity volatility not to be a concern.  Safe UK Bonds are currently out of the picture.  It is here where WP funds really are the only option that offers a reasonable hope on past performance of providing a greater than inflation return whilst avoiding major crashes.  It is reassuring that unlike many other funds this matches their stated objectives.

What is your proposal for managing the medium term?

I've just created a rough and ready example - 30 year retirement, zero fees

50% equity - 3.3% SWR
100% - 3.7%

Holding a 100% equity portfolio has (historically) provided a higher SWR than 50% equity. Of course, not many would be happy with a 100% equity portfolio, but equities do tend to give long term inflation protection. I'm not really sure how wealth preservation funds fit into the picture, or why you need to manage short or medium term?

I am not reassured by SWRs.  Never mind the dubious assumption that the future will be similar to the past, nor the fact that their values are completely determined by a very small number of very large effectively random events. More importantly they are based on historic zero total failures over 30 or so years .  I would have worried myself to an early grave long before my investments had dropped to zero.

The advantage I find with short and medium term portfolios is that severe drops in the long term investments can be completely ignored in the knowledge that they dont need to be touched for at least 10 years and probably much longer.  This has the resultant effect that the long term investments can be at a much higher risk level than would otherwise be the case.

So overall the broad % equity vs non-equity allocation may not be very different to say the traditional 60/40 portfolio.  Separating them means that one can set up the detailed allocations to meet the very different objectives and so hopefully achieve a financially stress-free retirement.

My comment wasn't really about SWRs. it was more about equities have been the only real option for long term inflation-beating returns. If you believe this will continue to be the case and are happy that the retirement pot will outlast you, then does the short and medium-term matter as much? 

"The advantage I find with short and medium term portfolios is that severe drops in the long term investments can be completely ignored in the knowledge that they dont need to be touched for at least 10 years and probably much longer.  This has the resultant effect that the long term investments can be at a much higher risk level than would otherwise be the case."

I can understand this from an emotional POV, but not sure that it enhances portfolio sustainability.

https://blog.iese.edu/jestrada/files/2019/01/BucketApproach.pdf

MarkCarnage

Index linked sovereign bonds were until fairly recently the best 'inflation beating' asset, largely because they began life in the 80s and 90s with pretty generous real returns baked in.
Now they have largely become inflation hedges with a cost attached.....in that real returns are likely to be negative if held to maturity. However, they are still the purest inflation hedge around. 
Equities have tended to provide long term inflation beating returns, but have had some significant and occasionally lengthy periods where they haven't. 
Currently most WP funds are holding predominantly IL bonds and gold as inflation hedges. Where they hold conventional sovereign bonds it tends to be very short duration, even T Bills as a cash proxy. 
Some posters here appear to have conflated their current asset allocations with a long term 'norm'. In reality, a quick check shows that their asset allocations vary quite a lot over time. 
Finally, much talk about diversification above. In reality in a real crisis, correlations between most asset classes, never mind sectors within them, tend to 1. If you want real diversification there, sovereign bonds, IL or conventional may offer it, but not always and not both, gold may offer it, or some hedge funds (though not most). Cat bonds might, derivative protection overlays might. Holding tech stocks won't. 

Audaxer

BritishInvestor said:

Linton said:

Deleted_User said:

AlanP_2 said:

Deleted_User said:

AlanP_2 said:

Deleted_User said:

To me, following market cap weightings is fairly pointless unless you simply want to follow the market....in which case just buy an index fund and be done with it. If you wanted to avoid the more volatile sectors of a market, I see nothing wrong with that in itself - you might forego larger gains by doing so, but at the same time avoid larger drops.....pretty much what I'd expect a fund, with the main aim of wealth preservation, to do......I don't see how doing so would necessarily increase risk.

You don’t need to follow the exact cap weightings but cutting out sectors and regions equates to taking bets.  

You don’t know what you will forego and avoid.  Someone avoiding US and Technology in 2010 would have foregone all growth in the next decade.  Could have been worse.  Diversification is the “free lunch”.  By cutting out whole sectors you are reducing diversification and increasing  risk. 

Risk of what?

Risk of losing money over a meaningful period of time. 

That can have different meanings dependent upon context. Real loss of money i.e. pot goes down in value or loss compared to ANO selection of assets? 

Also, it is just one risk, and may not be the one the individual wants to mitigate.

Take for example someone who wants to buy a property in 4 years time and is building a deposit.

Using your logic they should invest in global equities as per market cap, and maybe have some bonds, precious metal, commercial property, infrastructure etc. funds as well to make sure they haven't cut out any whole sectors.

They then have a real risk that, if markets fall, they could miss their target and have to delay their house purchase. They could mitigate this risk by keeping it all in cash accepting that they are likely to lose money over a meaningful period of time (to inflation) but have a much greater chance of hitting their target.

Your approach does not allow for individual context

That’s not my logic.  We are in a pension forum. Your scenario is very different. 

Everything you are saying especially about diversification relates to the long term.  Yes for long term growth WP funds are not appropriate except possibly for someone with strongh risk aversion where perceived safety is more important than total return.

However in retirement the short and medium term are equally important.  One has to eat whilst awaiting for the markets to return to their long term trends.  The short term can satisfactorily be managed with cash.  The difficult one is the medium term, say time-frames of  5-10 or possibly a bit more years.  In this medium term cash becomes more of a risk because of inflation whilst medium term timeframes are too short for equity volatility not to be a concern.  Safe UK Bonds are currently out of the picture.  It is here where WP funds really are the only option that offers a reasonable hope on past performance of providing a greater than inflation return whilst avoiding major crashes.  It is reassuring that unlike many other funds this matches their stated objectives.

What is your proposal for managing the medium term?

I've just created a rough and ready example - 30 year retirement, zero fees

50% equity - 3.3% SWR
100% - 3.7%

Holding a 100% equity portfolio has (historically) provided a higher SWR than 50% equity. Of course, not many would be happy with a 100% equity portfolio, but equities do tend to give long term inflation protection. I'm not really sure how wealth preservation funds fit into the picture, or why you need to manage short or medium term?

I think it all depends on the Sequence of Returns. In the case of a bad first decade of returns, I think a withdrawal rate of 3.7% for a 100% equity portfolio might not last over 30 years. 

MK62

Linton said:

BritishInvestor said:

Linton said:

Deleted_User said:

AlanP_2 said:

Deleted_User said:

AlanP_2 said:

Deleted_User said:

To me, following market cap weightings is fairly pointless unless you simply want to follow the market....in which case just buy an index fund and be done with it. If you wanted to avoid the more volatile sectors of a market, I see nothing wrong with that in itself - you might forego larger gains by doing so, but at the same time avoid larger drops.....pretty much what I'd expect a fund, with the main aim of wealth preservation, to do......I don't see how doing so would necessarily increase risk.

You don’t need to follow the exact cap weightings but cutting out sectors and regions equates to taking bets.  

You don’t know what you will forego and avoid.  Someone avoiding US and Technology in 2010 would have foregone all growth in the next decade.  Could have been worse.  Diversification is the “free lunch”.  By cutting out whole sectors you are reducing diversification and increasing  risk. 

Risk of what?

Risk of losing money over a meaningful period of time. 

That can have different meanings dependent upon context. Real loss of money i.e. pot goes down in value or loss compared to ANO selection of assets? 

Also, it is just one risk, and may not be the one the individual wants to mitigate.

Take for example someone who wants to buy a property in 4 years time and is building a deposit.

Using your logic they should invest in global equities as per market cap, and maybe have some bonds, precious metal, commercial property, infrastructure etc. funds as well to make sure they haven't cut out any whole sectors.

They then have a real risk that, if markets fall, they could miss their target and have to delay their house purchase. They could mitigate this risk by keeping it all in cash accepting that they are likely to lose money over a meaningful period of time (to inflation) but have a much greater chance of hitting their target.

Your approach does not allow for individual context

That’s not my logic.  We are in a pension forum. Your scenario is very different. 

Everything you are saying especially about diversification relates to the long term.  Yes for long term growth WP funds are not appropriate except possibly for someone with strongh risk aversion where perceived safety is more important than total return.

However in retirement the short and medium term are equally important.  One has to eat whilst awaiting for the markets to return to their long term trends.  The short term can satisfactorily be managed with cash.  The difficult one is the medium term, say time-frames of  5-10 or possibly a bit more years.  In this medium term cash becomes more of a risk because of inflation whilst medium term timeframes are too short for equity volatility not to be a concern.  Safe UK Bonds are currently out of the picture.  It is here where WP funds really are the only option that offers a reasonable hope on past performance of providing a greater than inflation return whilst avoiding major crashes.  It is reassuring that unlike many other funds this matches their stated objectives.

What is your proposal for managing the medium term?

I've just created a rough and ready example - 30 year retirement, zero fees

50% equity - 3.3% SWR
100% - 3.7%

Holding a 100% equity portfolio has (historically) provided a higher SWR than 50% equity. Of course, not many would be happy with a 100% equity portfolio, but equities do tend to give long term inflation protection. I'm not really sure how wealth preservation funds fit into the picture, or why you need to manage short or medium term?

I am not reassured by SWRs.  Never mind the dubious assumption that the future will be similar to the past, nor the fact that their values are completely determined by a very small number of very large effectively random events. More importantly they are based on historic zero total failures over 30 or so years .  I would have worried myself to an early grave long before my investments had dropped to zero.

Agreed.....and I'd further add that the last decade and a bit has been radically different to the past, with a global QE program pumping trillions of dollars (and dollar equivalents) into the "system"......the effects of that on markets over the next 30 years are yet to be seen - and even the so called experts can't agree. The big questions are "have current asset prices been artificially inflated due to QE, and if so, to what degree?" Most agree on the answer to the former being yes, but the latter is very hard to quantify. At some point, these programs have be wound down, and then reversed......it's quite possible that we could be looking at anaemic asset price growth for decades.....add in a dose of above average inflation, and the investment backed retirement landscape could quickly start to look a little more challenging.