I've settled on a one-fund plan, VBIAX, 60/40, across the board.
When I read about asset allocation and risk, the focus seems to be mostly on the personal nature of willingness, need related to actual results, and ability.
I'm not really clear about what "ability" means. I think it relates to the ability of the portfolio to recover from significant drawdown back to base, over a certain amount of time.
Is that what it really means? If so, is that what the financial retirement calculations reflect by success rate based on backtesting? If I'm 67, with a 60/40 asset allocation, a 4% constant withdrawal rate, and get a 95% predicted success rate over 20 years, does that mean that I likely have the ability to take a 60/40 risk?
When I read about asset allocation and risk, the focus seems to be mostly on the personal nature of willingness, need related to actual results, and ability.
I'm not really clear about what "ability" means. I think it relates to the ability of the portfolio to recover from significant drawdown back to base, over a certain amount of time.
Is that what it really means? If so, is that what the financial retirement calculations reflect by success rate based on backtesting? If I'm 67, with a 60/40 asset allocation, a 4% constant withdrawal rate, and get a 95% predicted success rate over 20 years, does that mean that I likely have the ability to take a 60/40 risk?
Statistics: Posted by TellMeMore — Sun Sep 29, 2024 2:59 pm — Replies 11 — Views 442