Voyant - cash growth rate of 3% - huh?

MrBobbins

Are there any people here actively using Voyant?

I’ve just signed up for the free month’s trial and I’ve been very impressed with it so far.  Some of the defaults have confused me a bit so far though, specifically the market assumption for cash growth rate of 3%! I’d been trying to simulate a 2 year cash buffer to avoid sequence of returns risk, but it feels like this default assumption would give an unrealistically optimistic effect on the overall simulation. Obviously I can override this (and have), but just wondered if anyone could explain the figure? Have I misunderstood what it represents?

Thrugelmir

Investment grade bonds 7%?  Is this a demo system rather than real time data. As your screenshot is dated as at 06/10/2021. 

dunstonh

Some of the defaults have confused me a bit so far though, specifically the market assumption for cash growth rate of 3%

I don't use it but it is possible that they leave it for you to decide the defaults and have only input dummy figures to get you started.  The figures seem unrealistic across the board.

Calculating your cash buffer without inputting defaults for dividends and interest won't give you an accurate projection on your cash buffer use either.

MrBobbins

Thrugelmir said:

Investment grade bonds 7%?  Is this a demo system rather than real time data. As your screenshot is dated as at 06/10/2021. 

Yeah, I wondered about that too. Would be interesting to hear from anyone with a paid subscription to see if it’s different. 

MrBobbins

dunstonh said:

Some of the defaults have confused me a bit so far though, specifically the market assumption for cash growth rate of 3%

I don't use it but it is possible that they leave it for you to decide the defaults and have only input dummy figures to get you started.  The figures seem unrealistic across the board.

Calculating your cash buffer without inputting defaults for dividends and interest won't give you an accurate projection on your cash buffer use either.

I'd previously changed the assumed rate of returns for my individual accounts, but I've just now clicked on the "change" button shown in my image. I was expecting it to allow changing each item individually, but it actually lets you choose between either the current "Dimensional funds" one, or a "[Expired] RSMR Market Assumptions" one. I tried that, and while being just as out of date, it looks a lot more usable as a base, at least for Cash:

DreZZ

I ignore the Dimensional Fund and RSMR market assumptions.  The way I set this up is to select chosen "inflation / growth"values in "plan settings".  I have "Grow all investments and retirement accounts using asset allocation" in "Calculation Settings" set to "No".  This ensures the only inflation / growth values active are the ones I have set. I currently have Inflation set at 3%, Savings set at 1%, Investments set at 5% (2% real).  These are not set and forget parameters - they are subject to review and I have the investment and savings rates intentionally conservative.

BritishInvestor

MrBobbins said:

Are there any people here actively using Voyant?

I’ve just signed up for the free month’s trial and I’ve been very impressed with it so far.  Some of the defaults have confused me a bit so far though, specifically the market assumption for cash growth rate of 3%! I’d been trying to simulate a 2 year cash buffer to avoid sequence of returns risk, but it feels like this default assumption would give an unrealistically optimistic effect on the overall simulation. Obviously I can override this (and have), but just wondered if anyone could explain the figure? Have I misunderstood what it represents?

"Are there any people here actively using Voyant?"

yes

"specifically the market assumption for cash growth rate of 3%"

These are (or should be) long term assumptions. 

"I’d been trying to simulate a 2 year cash buffer to avoid sequence of returns risk"

I'm not sure how a 2-year cash buffer will help when it's most needed, and Voyant probably isn't the best tool to simulate this - Timeline is better.

BritishInvestor

DreZZ said:

I ignore the Dimensional Fund and RSMR market assumptions.  The way I set this up is to select chosen "inflation / growth"values in "plan settings".  I have "Grow all investments and retirement accounts using asset allocation" in "Calculation Settings" set to "No".  This ensures the only inflation / growth values active are the ones I have set. I currently have Inflation set at 3%, Savings set at 1%, Investments set at 5% (2% real).  These are not set and forget parameters - they are subject to review and I have the investment and savings rates intentionally conservative.

2% real on investments isn't necessarily conservative.

DreZZ

Very true. It depends on the asset allocation and the investment time horizon.