Hi Bill, thanks for the wonderful book! Your research uses 5 stock asset classes (US large, small, mid, micro, and international) weighted equally. I was wondering how the historical SAFEMAX would change if an investor uses a total world stock fund such as Vanguard VT for their stock allocation instead? This fund tracks the FTSE Global All Cap Index, which has stocks of all sizes weights them by market cap. According to Morningstar it is 42.65% giant, 30.99% large, 18.39% mid, 5.24% small, 0.78% micro. The overall international exposure is 37.2%.

I realize it would be hard to give a precise answer, but would the safemax be somewhere between the “new” safemax and the older one that used s&p 500 only for stocks?

Thanks so much.  T.

 

Dear T,

Thanks for your question and your interest in my book. You pose an interesting question, as many people might opt for a single-fund option. I don’t have a good answer for you. I would have to research that. I have added it to my list of future research. It’s impossible to guess what the answer might be. It might be even higher than the SAFEMAX I have computed, as the fund invests a much higher fraction internationally than my proposed portfolio. I’ll try to get back to you with an answer. Note that this fund has only been in existence since the 1970s, and would not have as long a track record as my research.

 

Best regards,

 

Bill Bengen