What is unusual about this portfolio's asset allocation? From the percentile data and graphs, can you infer the probability that this portfolio will survive the withdrawals and unexpected drawdowns? Conversely, what is the likelihood that the portfolio will grow and provide a substantial bequest for the heirs of the investor?
Portfolio Allocation Asset Class Allocation 15 % US Small Cap Value 15.00% 35 % Emerging Markets 15.00% 15 % TIPS 35.00% Short Term Treasury 35.00% Save portfolio 35 % US Small Cap Value TIPS Emerging Markets Short Term Treasury Summary Statistics 10th Percentile 25th Percentile 50th Percentile 75th Percentile 90th Percentile Time Weighted Rate of Return (nominal) 4.28% 5.13% 6.06% 6.95% 7.76% Time Weighted Rate of Return (real) 2.29% 3.06% 3.89% 4.70% 5.43% Portfolio End Balance (nominal) $0.00 $458,281 $1,199,184 $2,155,091 $3,269,865 Portfolio End Balance (real) $0.00 $249,889 $649,784 $1,146,029 $1,704,083 Maximum Drawdown -100.00% -62.60% -31.66% -20.79% -16.17% Maximum Drawdown Excluding Cashflows -24.18% -18.96% -16.10% -16.10% -8.18% Safe Withdrawal Rate 4.45% 5.00% 5.68% 6.41% 7.09% Perpetual Withdrawal Rate 2.25% 2.98% 3.75% 4.50% 5.16% 8906 portfolios out of 10000 simulated portfolios (89.06%) survived all withdrawals. Simulated Portfolio Balances $3,500,000 $3,000,000 $2,500,000 $2,000,000 Portfolio Balance ($) $1,500,000 $1,000,000 $500,000 $0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Year 10th Percentile 25th Percentile 50th Percentile | - 75th Percentile - 90th Percentile Portfolio Allocation Asset Class Allocation 15 % US Small Cap Value 15.00% 35 % Emerging Markets 15.00% 15 % TIPS 35.00% Short Term Treasury 35.00% Save portfolio 35 % US Small Cap Value TIPS Emerging Markets Short Term Treasury Summary Statistics 10th Percentile 25th Percentile 50th Percentile 75th Percentile 90th Percentile Time Weighted Rate of Return (nominal) 4.28% 5.13% 6.06% 6.95% 7.76% Time Weighted Rate of Return (real) 2.29% 3.06% 3.89% 4.70% 5.43% Portfolio End Balance (nominal) $0.00 $458,281 $1,199,184 $2,155,091 $3,269,865 Portfolio End Balance (real) $0.00 $249,889 $649,784 $1,146,029 $1,704,083 Maximum Drawdown -100.00% -62.60% -31.66% -20.79% -16.17% Maximum Drawdown Excluding Cashflows -24.18% -18.96% -16.10% -16.10% -8.18% Safe Withdrawal Rate 4.45% 5.00% 5.68% 6.41% 7.09% Perpetual Withdrawal Rate 2.25% 2.98% 3.75% 4.50% 5.16% 8906 portfolios out of 10000 simulated portfolios (89.06%) survived all withdrawals. Simulated Portfolio Balances $3,500,000 $3,000,000 $2,500,000 $2,000,000 Portfolio Balance ($) $1,500,000 $1,000,000 $500,000 $0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Year 10th Percentile 25th Percentile 50th Percentile | - 75th Percentile - 90th Percentile
