A.I.M. Users Bulletin Board

[ls7550]

Hi Tom. RE: TWINdeVEST

Don't take this as reliable, very quick and dirty first cut spreadsheet

... but looks promising what applied against real world cases.

I ran two tests, comparing TWINdeVEST against all stock (S&P500, US inflation/$ values) with a 4% Safe Withdrawal Rate applied ($333/month, inflation adjusted withdrawals), one starting at the start of 2000 i.e. prior to the dot com bubble burst/down market, and another starting at the start of 2009, close to the Financial Crisis lows.

Both saw TWINdeVEST perform reasonably well. For the 2000 start date version it did run of of cash (was all in stock) at near the 2009 lows, so I just assumed it was stopped at that point. At that time all-stock was down to £34.2K from a original $100K start date value, whilst TWINdeVEST was down at $46.6K.

For the 2009 start date run, TWINdeVEST ended May 2020 with $301.1K (and 94% % stock) whilst all-stock stood at $320K. Considering TWINdeVEST started at 75% stock it did a reasonable job of keeping up with all-stock in a strong Bull phase.

75/25 yearly rebalanced constant weighted with the same withdrawals saw the 2000 to 2009 run with $50.9K, whilst the 2009 started run had $255.5K at the end of May 2020; So a modest amount better than TWINdeVEST in the Bear case, but considerably less in the Bull case.

Clive.

PS : Multiplying the bad case by the good case values (gains), had TWINdeVEST ahead of 75/25 which in turn was ahead of All-Stock.
i.e. 0.466 x 3.01 ... for TWINdeVEST versus 0.34 x 3.20 ... for all stock (and 0.509 x 2.55 for constant weighted 75/25). Such that over full cycles (both types of cycles, Bull and Bear) TWINdeVEST came out ahead).