ElLobo: ..........where you take the position that an all VWEHX portfolio, today, will support a real inflation adjusted 6% rate of withdrawal with a 100% probability of success to last 30 years.
ElLobo,
I don’t have the data from 1980, the fund’s inception, but the results from 6/1/1998 are shown below. This is based on your scenario. The initial distribution yield was 8.51%. Take an equivalent of 6% initial withdrawal and reinvest the remaining 2.51%. Adjust the initial withdrawal dollars by the actual inflation during the period, 2.31% annually
The results aren’t pretty. Both the NAV and the distributions declined during this period (actually over the entire life of the fund) and by 2002 the withdrawal was eating into principal to the point that you ended up with fewer shares than you started with. A 30 year portfolio life??
VWEHX from 6/1/1998 to 5/1/2008 | | |
| Initial 6/1/98 | Final 5/1/08 | Annual Change | |
Price/Share | $ 8.11 | $ 5.77 | -6.58% | |
| | | | |
Monthly Distribution | $ 0.057 | $0.036 | -8.78% | |
| | | | |
Distribution Yield (TTM) | 8.51% | 7.84% | -1.73% | |
| | | | |
Distribution Yield on Invested Capital | 8.51% | 5.50% | -8.36% | |
| | | | |
Market Value | $100,000.00 | $70648.58 | -6.71% | |
| | | | |
Shares | 12,330.456 | 12,244.122 | | |
| | | | |
Gain In Mkt Value | | $ (29,351.42) | | |
| | | | |
Net Reinvested Distributions | $ - | $ 377.85 | | |
| | | | |
| | | | |
Here’s the NAV performance:
http://tinurl.us/429b4e
Regards,
Lew
