SWR Calculators Starting September 5, 2006
Updated: November 4, 2007.
Improving the Retirement Trainer
First, I built the Retirement Trainer. It was my first excursion into Monte Carlo modeling. It included Mean Reversion. Then I introduced the Bull Bear Retirement Trainer. It introduced the ability to distinguish among long lasting (secular) Bull Markets, Bear Markets and Neutral Markets.
Now I have introduced a further refinement in my Type 2 Bull Bear Retirement Trainer. It is fun. It is realistic.
Improving the Retirement Trainer
Yahoo Briefcase
Type 2A Bull Bear Retirement Trainer
I am continuing to improve my Type 2 Bull Bear Retirement Trainer. It does a great job in Bear Markets. It doesn’t do a good job in Bull Markets. It fails to reach high valuations.
I examined a variety of alternatives. The simplest solution is best. Don’t use separate Bull Market equations. Use the standard (Neutral Market) equations except during Bear Markets.
Type 2A Bull Bear Retirement Trainer
Simplified Retirement Trainer A
I have generated a simplified version of the Retirement Trainer. This version uses previously calculated sequences. I have included two sets of eight. One set of sequences starts at today's valuations (P/E=27.3) and a secular (long lasting) Bear Market. The other set of sequences starts with bargain prices (P/E10=8.0) and a Bull Market.
Look for Simplified Ret Tr A in my Retirement Trainers folder.
Yahoo Briefcase
More PE10 Predictions
Here are more P/E10 predictions from my Type 2A Bull Bear Retirement Trainer.
I collected two sets of P/E10 data. Each set consists of eight runs. The first set assumes a Bear Market starting from today’s valuations, P/E10=27.3. The second set assumes a Neutral-Bull Market starting from P/E10=8.0.
I use these runs in my Simplified Retirement Trainer A.
More PE10 Predictions
Simplified Retirement Trainer with Dividends A
I have added dividends to the Simplified Retirement Trainer A.
Simplified Retirement Trainer with Dividends A
Stock Return Predictor with Earnings Growth Rate Adjustment
The earnings term in P/E10 is centered 5 years prior to the current price. This has no effect if the earnings growth rate is steady. To the extent that the smoothed earnings growth varies, it can make sense to add an adjustment. It is straightforward to come up with a new set of regression equations. The art is in knowing what growth rate to assume, since five years belong to the future.
This is a refinement. If you guess right, you get better numbers.
You can download a copy from my Yahoo Briefcase. It is the Stock Returns Adjusted file in the Lucky 7 Calculators Folder.
Stock Returns Adjusted Calculator
Yahoo Briefcase
Income Stream Allocator
I have built a spreadsheet to help with income portfolios. I have included a sample calculation.
January 30, 2007 UPDATE
I have corrected an error. As a result, I have two versions. One uses CDs or money market funds and the other uses TIPS.
Income Stream Allocator
Using the TIPS Income Stream Allocator B
I have built a spreadsheet to help with income portfolios. This tells you how to use it.
Using the TIPS Income Stream Allocator B
Expanded Allocator
I have built an expanded version of the Income Stream Allocator. It includes 5 income streams and a cash management account.
Expanded Allocator
Scenario Surfer Developments
I am continuing to build spreadsheets associated with the future Scenario Surfer. Refer to “May 2007 Highlights” for details. It will be an advanced Retirement Trainer.
We are considering placing rebalancing results side by side with those achieved by the user. You can download the latest version from my Yahoo Briefcase, Retirement Trainers folder, “Simp Ret Tr w Rebalancing D” file. It is an Excel spreadsheet.
It has a sample of how training improves results. With 20% stocks, 50% stocks and 80%, the Year 30 balances were $117K, $210K and $33K, respectively. With user inputs, the Year 30 balance was $1.58 million.
Yahoo Briefcase
Automatic Rebalancing Examples
If you have ever doubted the folly of automatic rebalancing, look at these retirement portfolio examples.
Automatic Rebalancing Examples
Automatic Allocator
I have placed my Automatic Allocator into my Yahoo Briefcase in the Allocators Folder. It is a modified version of the Expanded Allocator. It simplifies calculations when using a Dividend Blend.
Fill in the blocks and read the surplus cash balances (the Real TIPS Balance) for years 0 through 50. In this version, each year’s real (inflation adjusted) WITHDRAWAL AMOUNT is the same.
Yahoo Briefcase
Dividend Blend Calculator
I have put an easy to use Dividend Blend calculator into my Yahoo Briefcase. You can withdraw any amount that you enter until the TIPS cash management account shows a negative balance.
Select the Allocators folder. Download the Dividend Blend file. My Yahoo username is jwr19452000.
Yahoo Briefcase
Simp Auto Allocator
I have placed a Simplified version of the Automatic Allocator into my Yahoo Briefcase. Look for Simp Auto Allocator in my Allocators folder. My Yahoo username is jwr19452000.
Yahoo Briefcase
Scenario Surfer Generator
I have placed a Scenario Surfer Generator into my Yahoo Briefcase. It is the Scen Surf Generator file. It is in the Retirement Trainers folder. It allows you to generate credible sequences of cumulative stock returns and P/E10 as a function of the initial valuation. It incorporates two forms of Mean Reversion. It uses the same algorithms as the Type 2A Bull Bear Retirement Trainer.
My Yahoo username is jwr19452000.
Yahoo Briefcase
SWR Calculators through August 29, 2006
Briefcase of SWR Calculators, TIPS Ladder Calculators, Calculator Description (Deluxe Calculator V1.1A08a), Problem Downloading Calculators?, Using P/E10, Unclemick 01 Calculator, Valuation-Informed Indexing (Lucky 7) Calculators, P/Ex Data, Long-Term Stock Returns, The Big Project, Variable Terminal Value Rate Calculator A, Variable Terminal Value Rate Calculator B, Latch and Hold Calculators, Compact VTVR Calculators, A Tip about my Yahoo Briefcase, Super Variable Terminal Value Rate SVTVR Calculators, A Helpful Theorem, Year 15 Calculator A, Deluxe Calculator V1.1A08b, Retirement Trainer, New Search Feature.
SWR Calculators through August 29, 2006