"The 4% retirement rule ... is based on multiple studies that included using Monte Carlo analyses"
What the WSJ article says: "Based on pioneering research in the early 1990s by William Bengen, then a financial planner in California, the so-called 4% rule states that retirees can pull about 4% annually from their nest egg (a figure Mr. Bengen eventually set at 4.5%), with a high probability that their savings will last 30 years."
Bengen's research had nothing to do with Monte Carlo analyses, such as "This Vanguard Monte Carlo calculator."
Bengen said so himself: "Let me add that I am a great admirer of Vanguard and their effort to serve investors well with low-cost, well-managed funds. I use their funds in my personal portfolio. But our approach to computing "safe" withdrawal rates ... is quite different."
https://www.aaii.com/journal/article/insights-on-using-the-withdrawal-rule-from-its-creator
That excellent 2018 interview with Bengen was linked to by the WSJ article. To me what is interesting is not so much the 4% figure as why he picked a thirty year target. (FWIW, in 1994, the IRS joint life table for a couple of 65 year olds was 25 years. The current Table III shows 27.4 years for a 70 year old couple, so we can assume that a 65 year old couple would have at least a 30 year life expectancy per IRS today).
Also, in his followup that I quoted from above, he addressed @slick's 3.5%

In contrast, my methods use actual historical returns and inflation rates in the order in which they occurred. Vanguard's methods create sequences of returns and inflation which probably never happened in reality. As a result, they may generate "worst case" scenarios worse than anything that has ever happened, while my methods search for the worst case that has actually occurred.
Note also that Vanguard uses different asset classes than I do in my research.

When you change things like that, numbers can change radically.

@slick- Maybe what we need is a version of a Monte Carlo calculator to determine the chances of our longevity, which we could then match against the financial Monte Carlo results. That might radically change one of the major inputs to the financial calculator: the amount of time we are going to need any income at all. :)

>>>September 9, 2008; a bit of financial news

Hi Guys,
Forecasting the future, especially in financial matters, is indeed hazardous duty. Countless books and articles on forecasting accuracy (more like inaccuracy) can easily fill bookshelves. I own many and hopefully have learned just a little to dampen and control my emotional impulses. Among the many famous authors in this crowded field is Phil Tetlock. He has generated and documented much useful insights in this challenging fleld of study.
Here is a Link to one of his videos that just might interest and instruct you:

As a general observation, most proclaimed forecasting experts have poor records. Keeping score uncovers their frequent shortfalls. These failed experts have deep knowledge in one area. Most likely, true experts have reasonable knowledge in many diverse areas. Tetlock has identified these experts and their special characteristics over many decades of study.. It is not a short time task. Tetlock has called these few real experts "superforecasters".
I am not a member of that elite group.
Best Wishes

FYI: The financial crisis brought the global economy to the brink, with many regarding the bankruptcy of investment bank Lehman Brothers in September 2008 as the seminal moment of the great recession. That same year, the U.S. housing market went under water, J.P. Morgan acquired Bear Stearns in record time as it too faced collapse, stock markets crashed and the Federal Reserve slashed interest rates to their lowest in history. Ten years on, the J.P. Morgan Research team explores what has changed and what the future could hold for the global economy and markets
Regards,
Ted
https://www.jpmorgan.com/global/research/10-years-after-crisis

.....finance timelines below.
2007 Financial Markets Timeline

2008 Financial Markets Timeline
2009 Financial Markets Timeline
I may add a bit more; but have other appointments today, in my timeline.
Take care,
Catch

FYI: A veteran mutual-fund-watching journalist is now freelancing,
and a prominent trade publication for financial advisors is on the
hunt.
John Waggoner left InvestmentNews in June and has been
freelancing ever since, continuing to work from home in Vienna,
Virginia (outside Washington, D.C.), he confirms. He previously
served as a senior columnist and mutual funds reporter for the
FA-focused publication, yet he was laid off in June, he says. The
position has not yet been filled.
Regards,
Ted
http://www.mfwire.com/common/artprint2007.asp?storyID=58587&wireid=2

FYI: PIMCO, one of the world’s premier fixed income investment managers, has hired John Studzinski as Managing Director and Vice Chairman of PIMCO in its Executive Office. Mr. Studzinski, who has spent most of his career working in Asia and Europe, brings to PIMCO 30 years of experience as a trusted financial and strategic advisor who has forged deep bonds among the world’s leaders in business, finance, government and NGOs. He will be based in PIMCO’s New York office and will report to Emmanuel Roman, PIMCO’s Chief Executive Officer.
Regards,
Ted
https://finance.yahoo.com/news/pimco-hires-john-studzinski-managing-113000116.html

@Ted: An excerpt from a current Washington Post Article:
"Turkey’s woes could be just the start as record global debt bills come due"
"Ten years after the worst financial panic since the 1930s, growing debt burdens in key developing economies are fueling fears of a new crisis. For now, few experts think that a broader crisis is imminent. But the danger of a financial contagion should be taken more seriously in light of a massive increase in global debt since the 2008 downturn, the economists said."

I see no evidence that total assets is the culprit for SFGIX under-performance. 2.2B is not at all to high for an EM fund concentrated on large caps. Look at the T. Rowe Price fund, PREMX. It has 5.5B in assets. 2.2B for a large cap fund should not be a problem IMHO.
Read what Foster says in his reviews. He is pretty honest about the funds short-falls and under-performance. Basically, wrong bets on stock picks, countries and sectors. He talks about how he thought he positioned the fund for downside protection - and it didn't pan out. Quite honest.

The Fund’s poor performance relative to the benchmark stemmed from several holdings that produced acceptable financial results, but which disappointed some segment of investors (but not Seafarer). Many of these companies operate in the information technology sector, either in software or manufacturing: Venture of Singapore (a contract manufacturer of high-end electronic devices); TOTVS of Brazil (a commercial software company); and Delta of Taiwan (a diversified manufacturer of electronic systems and components). These three companies saw their share prices slump sharply in response to passable (but apparently disappointing) results. In all three cases, I believe the market’s response was grossly over-exaggerated.

https://www.seafarerfunds.com/funds/ogi/portfolio-review#performance-review

Thanks again @davidmoran
Re tutorial (noun) - Cambridge Dictionary
1. a period of study with a tutor involving one student or a small group
2. a period of study with a tutor and a small group of students
3. IT a document or website on a computer that shows you how to use a product in a series of easy stages:
Albeit, you used the adverb form of the word (which is rarely used). So to tie things together:
tutorially: in the manner of a tutorial (Collins Dictionary)
Here’s how M* describes Ms. Benz’s role and purpose: “Morningstar director of personal finance Christine Benz has developed a series of hypothetical portfolios for savers and retirees. These portfolios are offered as general examples for investors' reference. These portfolios are not personalized recommendations, nor are they investable products offered by Morningstar.”
Hope I’m not nit-picking. Just trying to understand why I should be particularly interested in her advice over, say, someone like Ol’Skeet here who does a great job explaining his long standing bucket approach or the folks at T. Rowe Price who present models by example. (ie - I can take apart a given target date retirement fund designed by them and visualize how much they allocate to different funds or sectors.) I’m not saying Christine Benz’s is bad advice. Just asking why she deserves more credence than someone else who’s equally (possibly more) experienced?
Nothing in Benz’s listed educational background (below) suggests any type of financial training or certification. All I see there is political science and East European history. Also, I’ve never thought of M* as an advisory firm. Always thought their forte was in statistical analysis of fund data. (But, I’ll admit to rarely looking at them.)
Christine Benz’s Experience (Linkedin) https://www.linkedin.com/in/christine-benz-b83b523/
Director of Personal Finance
Morningstar, Inc.
2008 – Present (10 years)
Director of Mutual Fund Analysis
Morningstar, Inc.
February 2006 – March 2008 (2 years 2 months)
Education
University of Illinois at Urbana-Champaign
BA, Political Science, Russian and East European Studies
Lyons Township High School
From Amazon https://www.amazon.com/Christine-Benz/e/B002PICOLS
“Christine (Benz) holds a bachelor's degree in political science and Russian/East European studies from the University of Illinois at Urbana-Champaign. She lives in the Chicago suburbs with her husband, Greg. She is an avid cook, a political junkie, and a long-suffering Chicago Cubs fan.”

Thanks @davidmoran
Who employs her? (some company or agency, wealthy individuals directly, financial planners)?
40 years is a long time. If she’s wrong, you wouldn’t know for a long time. I suppose it doesn’t matter because there’s probably no legal accountability anyway.
3 years (advertised by some here) doesn’t serm very meaningful to me. In a 40 year span (first investment to time of drawdown) a 3 year streak (positive or negative) would appear trivial.

FYI: It might seem odd to open a retirement account for a high school student.
But teenagers can get a big head start on long-term savings, financial advisers say, by stashing some of their earnings in a Roth individual retirement account.
Now is a good time to talk with teenagers about long-term savings using a Roth I.R.A. because they may have earned money from summer jobs, said Patricia A. Seaman, a spokeswoman for the National Endowment for Financial Education, a nonprofit organization that promotes financial literacy.
Teenagers can benefit from tax-free growth of investments in a Roth account years before they have the opportunity to contribute to a workplace retirement plan, Ms. Seaman said. And five decades of growth allows plenty of time to ride out market swings.
“The earlier you start,” Ms. Seaman said, “the more the time value of money works for you.”
A Roth I.R.A. for someone under 18 must be opened and managed by an adult custodian, like a parent or grandparent. The teenager must have earned income, whether from a formal job or from gigs like babysitting and lawn mowing. Children can contribute their total annual earnings up to $5,500.
Regards,
Ted
https://www.nytimes.com/2018/08/24/your-money/roth-ira-retirement-teenagers.html

As to the "cash" as a place to run to in the event of an equity melt. Well, if one is able to pull the evacuate equity soon enough, and choose not to go to U.S. bonds or notes, our current default core cash at Fidelity yields, 1.6%.

@Catch22,
Love the wry humor here. Pulling the “evacuate (cord)” fast enough and running to cash would work - I suppose. However, should Mr. “Know All” post the evacuate alarm on this forum (as I believe he intends), than wouldn’t everyone who reads the financial internet be pulling their evacuate cords all at the same time? And if that happened, the result might well resemble a bunch of bumper-cars all colliding mid-air. I shudder to think how that might turn out.
Also, some of us aging boomers suffer from arthritis and/or other incapacitations. The way my right shoulder feels some days, I fear I’d be among the last to yank that cord.
:)

@Ted...obviously you didn't watch the video. All of these issues are discussed in detail. The main point is that a reverse mortgage is a financial tool that might help retirees avoid sequence of return risk. This strategy increases final Inheritance (total net worth). One would open the reverse mortgage at 62 (pay the set up fees), have a small principal balance (As little as $50) and let the line of credit grow. It is the line of credit (available in a reverse mortgage) that one would want to tap (and then later pay off the borrowed amount) if markets dropped for a period of time.
Just one tool available to add buffer assets to your portfolio.

An explanation of how Turkey got over cooked:
From Cullen Roche:

...here’s a totally inadequate summary of what’s happening:
-Turkey wanted to spark growth and liberalized bank lending rules.
-Banks and local businesses borrowed a lot of foreign denominated debt.
-A boom ensued.
-A bust is now ensuing.

Here's the details:
Framing Turkey’s Financial Vulnerabilites: Some Rhymes with the Asian Crisis, but Not a Repeat
https://cfr.org/blog/gone-fishing-0

Bit short on time. But would love for somebody to dissect this fund and explain in detail how this fund continues to chalk-up double digit (or near double-digit) returns given its positioning by Price as “... a conservative value approach” to equity investing. The fund currently holds 4% in Price’s institutional money market fund. It is huge at over 30 Bil AUM (Lipper). That’s double DODBX or OAKBX according to the Lipper numbers I consulted. A glance at the top 10 holdings displays nothing remarkable save for the 4% money market position. It’s got automotive, financial and (a bit surprising - Microsoft) within the top 10. Fees are typical of other TRP funds at about 0.7%.
I’ve owned a small chunk of the fund for most of the 25 years I’ve been with Price. Have seen the fund go from a small opportunist (and nimble) mid-cap fund to a large hard to maneuver blue chip fund to whatever it’s morphed into today. Recent reading indicates they’ve been selling puts on equity funds. I’m not well versed on options, but gather that they limit both the potential upside and potential loss on a stock by doing this. The put-option also apparently generates additional income.
I’d be interested in knowing whether investor flows into the fund continued after it closed its doors to new investors. That’s hard to know, since AUM would have increased by benefit of fund performance as well. But if money is continuing to flow in that would partially explain (not completely) the fund’s sizzling performance, since that new money might well be driving up the individual assets which the fund owns - and would be buying with the new money.
Price has a great research and analytical team. I doubt there’s few better in the mutual fund universe. And, they do tilt their investment approach one way or the other depending on their very thorough macro economic readings. By now, the fund has become a bit of a flagship for the firm, so likely to receive their best money management people going forward. A loyal stable investor base goes a long way in aiding performance, as the need to sell holdings during market downturns is lessened.
I also hold OAKBX- which I believe should be about equal in performance. However, it has done nowhere near as well for several years. But OAKBX did survive the last bear market (‘07-‘09) with significantly smaller losses. And, I believe it would likely sustain smaller losses in another major downturn.

I am told by my ML handholder that etn status is not the reason, but its use of derivatives. Or something like that.
$7 is good; Fido is $5, if I am reading correctly; dunno why I balk, sez the guy who drives 3 miles to save $3 on scotch.
That Elements link is the single funniest piece of financial writing I have read in very many months.
But these are highly comical too, directly or indirectly.
https://www.etf.com/sections/blog/23314-the-worst-etf-in-the-world.html
https://www.elementsetn.com/ElementsETNUI/SPECTRUM-U.S.-ETN.aspx
Up a dime today. $4M in assets, sez M*. Strategy almost CAPE-like, har.

I would add Commandment #11 -- Exercise.
Perhaps that should be #1.
(I'll grant that the focus of the article's "comfortable" retirement was financial issues. But not much else matters without good health.)
David

+ 1 Too bad most don’t worry about their health until it is too late.

I would add Commandment #11 -- Exercise.
Perhaps that should be #1.
(I'll grant that the focus of the article's "comfortable" retirement was financial issues. But not much else matters without good health.)
David