Equity Timing: A Challenging Pursuit

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Equities typically offer higher returns than risk-free assets, but the variability in equity returns complicates effective timing of the equity premium. While investors often aim to buy low and sell high based on valuation metrics, short-term market movements make this strategy unreliable. Theoretical concepts may suggest optimal selling during high valuations and drawing from cash reserves at low valuations, but practical application reveals significant challenges and inconsistent results in executing this approach successfully.

What would you do if you ran out of money in retirement? It's hard to imagine a scarier outcome, and yet many on the FIRE path may be at risk for this if they get their portfolio withdrawal rate wrong. In this episode, Eric + Jason talk with Karsten Jeske, the creator of the Early Retirement Now blog. Known by many as "Big ERN", he is an economist who is well known to the FIRE community for his extensive work in characterizing safe withdrawal rates (SWR). In this episode, we dig into Karsten's free, powerful SWR Toolbox, and discuss topics including the downsides of FIRE calculators, 100% stock portfolios, the bucket strategy, why dividend investors are wrong, and his own post-FIRE life. If you're interested in FIRE, you can't afford to miss this information-packed episode!

Show notes: https://twosidesoffi.com/swr