Today I was wondering that most of the studies like the Trinity one is using US or World indexes, or at least that’s what I’ve read/thought.
I wonder if there is a study or at least a nice graph that show that even european or world ex US market behave the same way.
I’ve seen a vanguard ETF (world ex us something) that for the last 10 years made less than 1% gains.
Are we basing all our strategies by studying the us market?
Trinity study is limited (flawed) in various ways. There were a number of other studies that attempted to fill in some gaps. But nobody should be concluding from the Trinity study that we can invest a pot and assume that 4% will give us a safe early retirement. Unfortunately, many seem to do so because:
- they haven’t read the study
- they didn’t understand the assumptions/limitations/parameters
- they didn’t look at the differences between their situation and the scenarios envisaged by the study
US is kind of a lucky scenario.
Nice, If I “read” it correctly, in CH is between 2.5 and 3%. Assuming we have a swiss basket of stocks I presume.
Edit: global withdrawal rate of 0.47%. Are we doomed with VT & co?
This was quite an interesting chart too:
VT has currently around 60% US. US exposure grew over time, too, I believe it was around 53% 1-2 years ago, can’t find the exact data on it. US performed very well in past x-years, far better than Europe, Asia and emerging markets. VXUS/VEU, which I assume you mention in OP, did perform very poorly vs VT and esp vs VOO/VTI. They typically have a higher divident yield ~1.6-2% on VT/VOO vs ~3% on VXUS in the past. Is past performance indicative of future performance?
No that‘s just the Japan scenario. Something like 66.6% VT 33.3% domestic bonds should give you a SWR of 3-3.5%. I can‘t find the specific study right now.
This interview with Bengen is well worth the listen too:
i think global in this context means SWR for anyone in the world, which looking at the worst case scenario was Japan with 0.47%.
So basically they write a paper warning that you don’t have to look only at US and they ruin it by looking too much at Japan?
@Cortana Isn’t this a nice theme for your Bachelor?
The answer to your question should be here:
P.S. Everyone keeps talking about Japan, but nobody talks about how bad it could have been to be invested in Austria in 1900! Oh this recency bias!
Interesting that CS says 5% is Ok, while Cortana’s paper disagrees.
I might have to read more than just the summary