Archive of posts from June 2024

  • Should We Go With 3% Rule?

    I recently wrote a post about asset allocation in which a reader commented whether we should be using 3% safe withdrawal rate in Indian context instead of the 4% safe withdrawal rate that is generally accepted in the US (at least in the past). The commenter also provided a video supporting the 3% rule. I strongly encourage you to watch that first. It makes some good arguments. If you are interested, I’d also suggest you read the paper which contains all the details, assumptions, data and methodology used for the simulations. According to the research paper, it is recommended that one should go with a 3% safe withdrawal rate instead of the generally well known 4% rate.

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  • How Not To Teach

    So this other day, me and my daughter were watching a video where the author was talking about infinity and how if you divide a number by zero you get infinity. My daughter could not understand how anything can be divided into zero parts. Or how attempting to divide something into zero parts blows up into this huge number that we call infinity. Being the smart alec that I am, I thought I could explain her how division works and how something divided by zero gives you infinity. As you can imagine, I made a huge mess of it and it showed me how little I knew about teaching to kids. If you take pleasure in seeing a grown man fumble with math, go on.

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  • Is The Stock Market Peaking?

    I am a little bit concerned. The stock market has been giving great returns for the past 3 years or so. Since the COVID-19 pandemic there has never been a long drawn bear market scenario. How long can this continue? On top of it, I see more and more people getting involved in trading. Some are even quitting their jobs to do trading full time. Generally, when there is euphoria in the market, you see these kind of events happening. New traders, who think they are investors and think they have the know how, enter the stock market just as the market starts peaking. Then, armed with a bunch of algorithms based on back testing, start to do algo trading. When you see more and more of these people, you know the time has come for the market to crash.

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