More Gummy Slices Addendum Two

Here are the regression equations for the stock-only portfolios HSWR100C, HSWR100G and HSWR100V. The 30-year Historical Surviving Withdrawal Rate y varies with x, the Percentage Earnings Yield 100E10/P:

HSWR100C: y = 1.3426x-0.2089 plus and minus 2%. R-squared is 0.7642.
HSWR100G: y = 1.1068x-0.4583 plus and minus 2%. R-squared is 0.7168.
HSWR100V: y = 1.5139x+0.4185 plus and minus 5%. R-squared is 0.6529.

I set the expenses at 0.20%. I used the CPI for inflation adjustments. I adjusted withdrawals to match inflation. The withdrawal rate is a percentage of the portfolio's initial balance.

The 30-year Historical Surviving Withdrawal Rate is the maximum rate that would have had a positive balance at year 30. The balance at year 30 would have been zero or negative if the withdrawal rate were increased by 0.1%.

The worst case 30-year Historical Surviving Withdrawal Rate of HSWR100C was 3.5% for the sequence beginning in 1929. The worst case 30-year Historical Surviving Withdrawal Rate of HSWR100G was 3.7% for the sequence beginning in 1929. The worst case 30-year Historical Surviving Withdrawal Rate of HSWR100V was 3.0% for the sequence beginning in 1929.

I have posted withdrawal rates and a graph in my Yahoo Briefcase. It is in the HSWR50CT GT VT VTn folder.

Yahoo Briefcase

Have fun.

John Walter Russell
November 30, 2000