Modeling Adaptive Upside Investing Methodology

Hi, I have been reading a book that advocates an methodology that appears to be what I would call "rolling window" upside investing. My question is how to model this methodology with the existing software. If it is not possible, does ESPlanner allow the user to customize the Upside Investing mode? As with Upside Investing, there are two asset classes: Safe and Risky. Risky is invested 100% in the Stock Market. The Safe Assets are intended to meet spending requirements for a fixed sized "rolling window", say, 4 years.
Risky assets are converted to Safe assets once a year using an adaptive algorithm that is dependent on market behavior. Specifically, market behavior is categorized (after the fact) once a year as an "Up year" or a "Down year"
In general, at the end of a "Up year" , the annual withdrawal are made from the Risky Assets and converted into Safe Assets. At the end of a "Down year" , the annual withdrawal are from Safe assets. In the event that a long sequence of "Down years" happens, and thereby the Safe assets are depleted, withdrawals instead are from Risky Assets. When the market comes back up, increased withdrawals are made to replenish the Safe Assets.

Thank you, Jan


dan royer's picture

I'll show your comments to Kotlikoff and see what he says.

This seems more sensible to me than the current Upside methodology, and similar to the popular Morningstar "bucket" approach to retirement planning. Is there an update on a response to Jan's question? Thanks

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