January 25, 2023 Welcome to another part of my Safe Withdrawal Rate Series. Today’s topic: Bucket Strategies in retirement. As you know, my blogging buddy Fritz Gilbert has written extensively on this topic at his Retirement Manifesto blog, for example: And likewise, I have written about my skepticism of bucket strategies in Part 48 of … Continue reading Discussing Retirement Bucket Strategies with Fritz Gilbert – SWR Series Part 55
January 9, 2023 Happy New Year, everyone! I haven’t written any updates on my put-writing strategy in a while, so I thought this is an excellent opportunity to review the year 2022 performance and some of the changes I have made since my last write-up in late 2021. Let’s take a look… 2022 Performance After … Continue reading Passive income through option writing: Part 10 – Year 2022 Review
December 7, 2022 The number one story in the crypto world this year (or decade? or century?) must be the FTX crypto platform collapse. It’s mindblowing how quickly FTX went from one of the largest crypto exchanges with a 150-second Superbowl commercial in February 2022, naming rights to sports arenas, numerous A-list celebrity endorsements, etc., … Continue reading A Post-Mortem for a Crypto Exchange: Is FTX worse than Bernie Madoff?
November 16, 2022 After the big jump in the stock market last week, everybody’s worries should be over, right? Well, maybe not. Real estate looks a bit shaky now! Prices have come down just a notch, but is there more to follow? Are the wheels coming off? Is the market going to crash? What’s the … Continue reading Who’s afraid of a housing crash?
November 2, 2022 In my post three weeks ago, I happily declared that the 4% Rule works again, thanks to the much more attractive equity and bond valuations. It’s always fun to deliver pleasant news. But keep in mind, everyone, that this refers to today’s retirees with their slightly depleted portfolios. But how about the … Continue reading Could 2022 be worse than 2001?
October 12, 2022 As promised in the “Building a Better CAPE Ratio” post last week, here’s an update on how I like to use the CAPE ratio calculations in the context of my Safe Withdrawal Rate Research. I have studied CAPE-based withdrawal rates in the past (see Part 11, Part 18, Part 24, Part 25) … Continue reading The 4% Rule Works Again! An Update on Dynamic Withdrawal Rates based on the Shiller CAPE – SWR Series Part 54
October 5, 2022 After a bit of a hiatus from the blog – thanks to our ambitious summer travel schedule – it’s time for another post. Over the years, I’ve gotten a lot of questions about the Shiller CAPE Ratio and if it’s still relevant. If you’re a regular reader of my blog, you’ll likely … Continue reading Building a Better CAPE Ratio
August 5, 2022 Last week we got the Q2 GDP numbers and the Bureau of Economic Analysis (BEA) confirmed that GDP has now declined for two consecutive quarters. What do I make of that? Are we in a recession now? Since several people asked me to comment on this issue, here are my thoughts… In … Continue reading Recession Or Not?
July 5, 2022 Over the last few decades, we’ve become accustomed to a negative correlation between stocks and U.S. Treasury bonds. Bonds used to serve as a great diversifier against macroeconomic risk. Specifically, the last four downturns in 1991, 2001, 2007-2009, and 2020 were all so-called “demand-side” recessions where the drop in GDP went hand-in-hand … Continue reading Hedging Against Inflation and Monetary Policy Risk
June 15, 2022 With the recent confirmation of a Bear Market finally taking hold, I’ve gotten some requests to comment on the situation: Are we going to have a recession? What’s my inflation outlook? What to expect from the Federal Reserve? What does this all mean for us in the FIRE community? Let’s take a … Continue reading The Bear Market is here. What Now?
June 6, 2022 In this year’s April Fool’s post, I marketed a made-up crypto coin that would completely hedge against Sequence Risk, the dreaded destroyer of retirement dreams. Once and for all! Most readers would have figured out this was a hoax because that complete hedge against Sequence Risk is still elusive after so many posts … Continue reading Hedging against Sequence Risk through a “Retiree-Saver Investment Pact” – SWR Series Part 53
April 25, 2022 If you remember my April Fools Day post from a few weeks ago, I poked fun at the proliferation of new crypto coins. Most of them are scams. But what about the mainstream crypto coins, like Bitcoin, Ethereum, etc.? Are they a good investment? What’s not to like about a 100%+ annualized … Continue reading Crypto is probably a bad investment!
April 1, 2022 If you’re familiar with my work on Safe Withdrawal Rates, you’ll know that the number one concern for retirees is Sequence of Return Risk. Well, hopefully, this will soon be a thing of the past. I’m now ready to announce the complete “retirement” (pun intended) of my Safe Withdrawal Rate Research because, … Continue reading Introducing the ERN-approved Crypto Coin
March 21, 2022 Last year in Part 49 of the Safe Withdrawal Series, I wrote a post about using leverage in retirement, and in today’s post, I like to explore some additional issues. A quick recap, the appeal of using leverage in retirement is that we would borrow against the portfolio instead of liquidating assets. … Continue reading Timing Leverage in Retirement – SWR Series Part 52
February 28, 2022 What a difference a year makes! In late 2020, only about 16 months ago, I felt the urge to comment on the then-fashionable discussion of how low inflation would impact retirees. See Part 41 – Can we raise our Safe Withdrawal Rate when inflation is low? of my SWR Series. Feels like … Continue reading Retirement in a High-Inflation Environment – SWR Series Part 51
January 13, 2022 According to the most recent inflation numbers that came out yesterday (1/13), CPI inflation is now running at 7% year-over-year. From September to December we saw a 2.2% increase, which is a 9.1% annualized rate. And it’s not all energy and food inflation. The core CPI is also elevated at 5.5% year-over-year. … Continue reading Inflation at 7%! Here’s why I’m not running for the hills (yet)!
January 3, 2021 Happy New Year, everybody. I hope you had a relaxing and healthy Christmas and a good start to the New Year! Last month was the 5th anniversary of the Safe Withdrawal Rate Series! In December 2016, I published the first part of that series. I had material for maybe four or five … Continue reading Ten things the “Makers” of the FIRE movement don’t want you to know – SWR Series Part 50
December 9, 2021 Last month, I published Part 49 of my Safe Withdrawal Rate Series, dealing with leverage in retirement. In that post, I surmised that the cheapest form of leverage likely comes in the form of a margin loan in an Interactive Brokers (IB) account. If you have the IB Pro account you have … Continue reading Low-Cost Leverage: The “Box Spread” Trade
November 16, 2021 My Safe Withdrawal Series has grown to almost 50 parts. After nearly 5 years of researching this topic and writing and speaking about it, a comprehensive solution to Sequence Risk is still elusive. So today I like to write about another potential “fix” of Sequence Risk headache: Instead of selling assets in … Continue reading Using Leverage in Retirement – SWR Series Part 49
November 10, 2021 Welcome to a new post in the Put Option Writing Series. My blogging buddy Spintwig volunteered to perform another backtest simulation. If you remember from Part 5, he simulated selling 5-delta and 10-delta put options going back to 2018. He now added 18 more months of returns to go back to September … Continue reading Passive income through option writing: Part 9 – 2016-2021 backtest: Guest Post by “Spintwig”