Author Topic: cFIREsim Gold Question  (Read 1547 times)

Retire-Canada

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cFIREsim Gold Question
« on: November 09, 2015, 02:37:49 PM »
I've punched my numbers into cFIREsim and if I use Equities = 80%, Bonds = 10% & Gold = 10% I get 1-5% better success results than Equities = 90% and Bonds = 10%.

My actual current AA is:

Stocks 80%
- USA = 50%
- CDN = 30%
- Int'l Dev = 10%
- Int'l EM = 10%

REIT = 10%
Bonds = 10%

My understanding of why gold improves the success in cFIREsim is the diversification compared to the other asset classes. Having said that with a more diverse AA than is possible in cFIREsim do you see any point in trying to get even further diversified by investing in gold or something of that nature?

If so I assume gold bricks in the basement isn't the answer.
« Last Edit: November 09, 2015, 02:40:27 PM by Vikb »

Cheddar Stacker

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Re: cFIREsim Gold Question
« Reply #1 on: November 09, 2015, 02:52:56 PM »
You should check this website out.

http://portfoliocharts.com/

The creator (Tyler) is a member here and has created a few threads discussing the website, particularly about how with the right AA it's possible to substantially outperform the 4% SWR.
http://forum.mrmoneymustache.com/investor-alley/asset-allocation-and-safe-withdrawal-rates/

Here's another thread discussing the site.
http://forum.mrmoneymustache.com/investor-alley/new-portfolio-visualizer-tool-httpportfoliocharts-comcalculators/

Also, GLD is what you're looking for, not bars in the basement.

Retire-Canada

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Re: cFIREsim Gold Question
« Reply #2 on: November 09, 2015, 04:45:22 PM »
At least for historical data purposes 10% gold does have a noticeable impact on SWR and success rates. I guess I'll have to consider switching the 10% REITs to GLD.

smilla

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Re: cFIREsim Gold Question
« Reply #3 on: November 09, 2015, 04:46:38 PM »
Also, GLD is what you're looking for, not bars in the basement.

In Canada you'd look for IGT.TO which is the cross-listing of IAU (unless you have a USD investment account). There is also CGL.C (CGL if you want currency hedging); the MER is double but, if you have a Scotia iTrade acct, it trades commission free.

http://canadiancouchpotato.com/2011/07/25/ask-the-spud-ishares-gold-trust/
http://canadiancouchpotato.com/2011/07/28/claymores-cgl-when-buying-gold-isnt-enough/

+1 to Tyler's site and also check out www.portfoliovisualizer.com - both sites allow more specific asset choices for portfolio comparison.

Retire-Canada

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Re: cFIREsim Gold Question
« Reply #4 on: November 09, 2015, 05:11:43 PM »
Thanks your replies were helpful. :)