Current Research P: Balances and Time

Updated: August 15, 2009.

Current Research Index

Current Research P: Balances and Time

I used the Scenario Surfer to give us an idea of how balances develop throughout the years. This shows the degree of predictability from early returns.

P/E10=20 Bear Market with ZERO Withdrawals

This shows how ten runs developed over time. The stock allocation was 100%. There is very little predictability.

P/E10=20 Bear Market with 5% Withdrawals

This shows how ten runs developed over time. The stock allocation was 100%. There is considerable predictability because of withdrawals.

P/E10=20 Bear Market Dollar Cost Averaging ($1000 increments)

This shows how ten runs developed with dollar cost averaging. The stock allocation was 100%. There is very little predictability.

P/E10=20 Bear Market with 5% Withdrawals and VII

This shows how ten runs developed over time. The stock allocation was varied according to valuations (Valuation Informed Indexing). The TIPS interest rate was 2%. Notice that all portfolios survived the full 30 years. There is very little predictability.

Early Gains

It is better for the accumulator to experience lower stock market returns in the early years. He ends up with a larger balance later on.

Early Gains