You are here
Categories
- ►Basics (222)
- The Problem (19)
- ►Costs & Taxes (162)
- Cash & Debt (16)
- MoneyDeck (36)
- FIRE & Frugal (9)
- Elements (25)
- ►Passive & Assets (166)
- RoboAdvice (21)
- Passive (29)
- ►Assets (53)
- Crypto (24)
- Diversification (48)
- Factors (9)
- Rebalancing (5)
- ►Active investing (438)
- ►Technical Analysis (22)
- Spread Betting (10)
- Fundamental Analysis (7)
- ►What works (227)
- Trend (21)
- Leverage (18)
- TAA (16)
- Long Vol (5)
- Low Vol (3)
- Pairs (1)
- Stock Screens (106)
- Crisis Alpha (11)
- Bessembinder (8)
- ►Tools (34)
- Database (6)
- Options (18)
- Coronavirus (9)
- Investor Diaries (93)
- Market Timing (8)
- ►Technical Analysis (22)
- ►Decumulation (48)
- Drawdown (13)
- Pensions (26)
- Sequencing (3)
- NextGen (1)
- ►Portfolios (177)
- ►Theme (19)
- Investment Trusts (11)
- ESG (7)
- Smart Beta (1)
- ►Core (58)
- ETFs (14)
- HL (3)
- Mike’s portfolio (23)
- VCTs (18)
- ►Stock (80)
- Piggyback (22)
- SmallCap (AIM) (32)
- Defensive (15)
- Sectors (8)
- Unconstrained (3)
- ►Trend (18)
- ►Theme (19)
- ►Gurus (346)
- ►Buffett (25)
- Buffettology (7)
- Wizards (48)
- ►Required Reading (91)
- 100 Baggers (6)
- Excess Returns (14)
- Behavioural Investing (5)
- Ten Ways (5)
- Execution (4)
- Farleigh (1)
- Stock Profits (5)
- Sceptical (6)
- Marks (6)
- Expected Returns (9)
- Taleb (8)
- Sand Hill (6)
- Ariely (16)
- ►Masters (21)
- 1 Thing (9)
- Free Capital (12)
- ►Traders (59)
- ►Simple Approaches (33)
- Smarter Investing (5)
- Alpha Architect (6)
- Demystified (6)
- Bell (5)
- Collins (6)
- Josh Brown (5)
- ►Box Systems (13)
- ►Trend Following (26)
- Own The World (8)
- Covel (10)
- Turtles (8)
- ►UK Stock Pickers (12)
- ►Rich (18)
- ►Buffett (25)
- ▼Books (70)
- Book Reviews (4)
- BIM (19)
- R2R (47)
- ►News (685)
- Featured (14)
- Events (31)
- Reports (93)
- Partners (19)
- UK Budgets (23)
- ►Economics (53)
- ►Psychology (14)
- Housel (6)
- 23 Things (10)
- Opinion (10)
- GDP (3)
- Basic income (3)
- Freakonomics (5)
- ►Psychology (14)
Archives
Reddit – /r/UKFinanceOver30
More
In preparing for battle, I have always found that plans are useless but planning is indispensable.
— General Eisenhower
Popular Posts & Pages
- Mark Minervini 1 – ... 14.6k views
- Stan Weinstein’s Stage System ... 12.7k views
- A guide for the ... 10.1k views
- UK budget breakdown – ... 9.3k views
- The Plan 8.1k views
- Ready-Made Portfolios – Hargreaves ... 7.4k views
- Savings Rate – the ... 7.3k views
- NEST vs The People’s ... 6.8k views
- Starting an Investment Club 6.6k views
- Investment Trust Portfolio – ... 6.4k views
Categories
1 Thing23 Things100 BaggersActive investingAlpha ArchitectArielyAssetsBabylonBasic incomeBasicsBehavioural InvestingBellBessembinderBIMBonkersBook ReviewsBooksBox SystemsBuffettBuffettologyCarverCash & DebtCollinsCoreCoronavirusCostsCosts & TaxesCovelCrisis AlphaCryptoDatabaseDecumulationDefensiveDemystifiedDennisDiversificationDrawdownEconomicsElderElementsESGETFsEventsExcess ReturnsExecutionExpected ReturnsFactorsFarleighFeaturedFIRE & FrugalFreakonomicsFree CapitalFundamental AnalysisGDPGurusHLHouselIHTInvestment TrustsInvestor DiariesJeavonsJosh BrownLeverageLong VolLow VolMarket TimingMarksMastersMATSMike's portfolioMinerviniMoneyDeckNaked TraderNewsNextGenOakleyOpinionOptionsOwn The WorldPairsPartnersPassivePassive & AssetsPensionsPiggybackPortfoliosPryorPsychologyR2RRebalancingReportsRequired ReadingRichRich DadRoboAdviceSand HillScepticalSectorsSequencingSethiShingSimple ApproachesSmallCap (AIM)Smart BetaSmarter InvestingSocialSpread BettingStockStock ProfitsStock ScreensTAATalebTaxesTechnical AnalysisTen WaysTharpThemeThe ProblemToolsTradersTrendTrendTrend FollowingTurtlesUK BudgetsUK Stock PickersUnconstrainedVCTsWeinsteinWhat worksWizards
When looking at CAPE based rules – where do you take the CAPE value from – ie: as CAPE will vary in different regiosn is this a global value or do you average out CAPE based on your own asset allocation to arrive at a portfolio average?
It’s a good question. I don’t use CAPE rules, so this is not my personal practice.
The people who write about CAPE rules are usually American, and they would use a US CAPE. I think that a global CAPE or a weighted average of your (stock) portfolio are each defensible, and it might come down to which was easier to calculate / access.
The key would be to use the same system each year, and not to chop and change.
Thanks Mike – I agree that picking something and sticking with it is the way to go.
I also saw antoher CAPE based approach, which could be easily confused with this, where one sells down equity or fixed income to withdraw depending on CAPE to average CAPE.
Yes, there are a lot of approaches, but generally, you are either changing the amount you take out each year (dynamic spending) or the split between stocks and others (dynamic allocation).
The safest approach is to build a pot big enough so that you can live off 3% pa and then set your equity allocation as close to 75% as you can get it.