You can be 100% invested in stocks and not just buy TSM. There are a number of stock markets around the world to diversify your investments.
Very true. I appreciate your point and updated the thread title to promote a more constructive conversation.
Now THIS is a conversation I can get behind :)
So if I do the math and calculate I only need a 5% real CAGR, and exclude everything that isn't either a total market index fund, or a treasury it looks like I have some nice options with much lower volatility:
#10 looks pretty interesting, let's plot that on a chart vs 50/50 USA/International stocks:
Ok, looks like I almost match the returns of 100% stocks, but with much lower volatility. Perfect! However, this is just a single deposit, sitting there for 44 years. Let's see what this would look like during the accumulation phase:
Initial Amount: $10,000
Contributing: $10,000 a year, inflation adjusted
Hey cool! I actually beat out 100% stocks by a little bit, and again with much lower volatility! Win! Let's see how this looks during the withdrawal phase, once I'm retired:
Initial Amount: $1,000,000
Withdrawal: $40,000 a year, inflation adjusted
Ouch! Sure I had less volatility, but I also had less money. I'd need a 50% gain just to match the 100% stock portfolio. Ok, ok, maybe this isn't a fair comparison. What would've happened if I contributed $10,000 a year until I reached $1,000,000, then withdrew an inflation adjusted $40,000 with the 4% rule?
100% stocks reached a million in 1985. Today the portfolio is worth $5,486,439.
33/33/34 USA/International/LTT reached a million in 1986. Today the portfolio is worth $5,766,920.
Seems like a wash, besides the extra year of retirement of course. I'm not really sure where I'm going with this. It seems the calculation is much more complex than it first seems. Despite the tool showing this portfolio was better, it still lost to 100% stocks in my opinion. This is assuming of course, that you're suited to handling the extra volatility, which I think is one of your main points in creating this. Most people aren't.
As you noted, "tools like this are valuable as one piece of the larger puzzle to validate portfolio theories and explore new ideas." I'd have to say I agree with that.