Tham khảo tài liệu 'the four pillars of investing: lessons for building a winning portfolio_11', tài chính - ngân hàng, tài chính doanh nghiệp phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | Will You Have Enough 235 of the portfolio which is a measure of portfolio risk. I ve found that Monte Carlo gives results very similar to those obtained in the Trinity study with the additional advantage that it allows you the flexibility of adjusting portfolio risk and return. Don t worry about having to do calculations manually Efficient Solutions has written a simple and inexpensive Windows-based Monte Carlo It s important to realize how the traditional amortization method and the more sophisticated methods relate Trinity study data in Figures 12-1 to 12-4 and Monte Carlo . The amortization method which assumes that you earn the same return each year computes the withdrawal rate or nest egg size at which the more sophisticated methods indicate a 50 chance of success. That s not enough margin of error for most investors. There s a simple way of estimating how much you can withdraw to get to 90 success Subtract 1 from your withdrawal rate for a portfolio that is mostly bonds and 2 for one that is mostly equity. Say you think that your stock portfolio has an expected return of 5 . That means that to have a 90 chance of success you can only withdraw 3 of the real initial nest egg each year. Finally Uncle Sam has provided a tempting way out of this dilemma. Treasury Inflation Protected Securities TIPS currently yield a inflation-adjusted return. If you can live on of your savings and you can shelter almost all of your retirement money in a Roth IRA which does not require mandatory distributions after age 70 1 2 then you are guaranteed success for up to 30 years which is the current maturity of the longest bond. For devout believers in the value of a well-diversified portfolio this option is profoundly unappealing as this is a poorly diversified portfolio the financial equivalent of Eden s snake. Although it s a very secure basket At a minimum however some commitment to TIPS in your sheltered accounts is probably not a bad idea. At the end of the day
