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So many straw mans in your argument I do not even know where to begin. its like whenever I explain things you just tune out and repeat your straw man arguments.

1) You did no such thing about showing it is the case most of the time. You cherry picked some starting points which were favorable to you. Somebody would need to write a full academic paper with thorough back-testing going back over every monthly period over the past 100 years to prove either one of us right or wrong. It is a generally safe bet that the share market will grow your wealth when you are in accumulation phase if you have a long enough time horizon. But all I am trying to point out is that its far less certain that share market in retirement can give people both money to live and maintain your capital against inflation at the same time.

2) I already gave a detailed explanation about total return and ignoring dividends. Being that however from you receive your returns you need some money annually to live on if you are retired and its generally accepted within the financial sphere (based on various academic papers, etc) that 3 -5% is the safe withdrawal rate for equities in general (of course it doesn't apply 100% of the time). It just so happens that on average dividend yields in Australia average 3 - 5% in most years plus some franking credits so the dividends paid approximate the safe withdrawal rate of money you can draw down. Therefore as a rule of thumb the dividends over time approximate the amount of money you can safely withdraw and therefore we have to see if the remainder of the money (i.e. the capital) manages to at least match inflation.

You can choose to invest all the money in an asset such as Berkshire Hathaway which pays no dividend and sell 3 -5% of your shares each year, etc. Either way you need a certain amount of money to live and we have to see if the remainder of the money at least stays intact against inflation. Ideally a sound investment should give you enough to live plus maintain itself against inflation.

Hence given the above as a short hand if you are looking at the Australian stock market I would say total return is the figure to look at for people in accumulation phase and price return is the more relevant figure to benchmark for retirees (because you assume dividends get spent).

<blockquote data-quote="Value Hunter" data-source="post: 1272998" data-attributes="member: 52375">So many straw mans in your argument I do not even know where to begin. its like whenever I explain things you just tune out and repeat your straw man arguments.1) You did no such thing about showing it is the case most of the time. You cherry picked some starting points which were favorable to you. Somebody would need to write a full academic paper with thorough back-testing going back over every monthly period over the past 100 years to prove either one of us right or wrong. It is a generally safe bet that the share market will grow your wealth when you are in accumulation phase if you have a long enough time horizon. But all I am trying to point out is that its far less certain that share market in retirement can give people both money to live and maintain your capital against inflation at the same time.2) I already gave a detailed explanation about total return and ignoring dividends. Being that however from you receive your returns you need some money annually to live on if you are retired and its generally accepted within the financial sphere (based on various academic papers, etc) that 3 -5% is the safe withdrawal rate for equities in general (of course it doesn&#039;t apply 100% of the time). It just so happens that on average dividend yields in Australia average 3 - 5% in most years plus some franking credits so the dividends paid approximate the safe withdrawal rate of money you can draw down. Therefore as a rule of thumb the dividends over time approximate the amount of money you can safely withdraw and therefore we have to see if the remainder of the money (i.e. the capital) manages to at least match inflation.You can choose to invest all the money in an asset such as Berkshire Hathaway which pays no dividend and sell 3 -5% of your shares each year, etc. Either way you need a certain amount of money to live and we have to see if the remainder of the money at least stays intact against inflation. Ideally a sound investment should give you enough to live plus maintain itself against inflation.Hence given the above as a short hand if you are looking at the Australian stock market I would say total return is the figure to look at for people in accumulation phase and price return is the more relevant figure to benchmark for retirees (because you assume dividends get spent).</blockquote>

[QUOTE="Value Hunter, post: 1272998, member: 52375"] So many straw mans in your argument I do not even know where to begin. its like whenever I explain things you just tune out and repeat your straw man arguments. 1) You did no such thing about showing it is the case most of the time. You cherry picked some starting points which were favorable to you. Somebody would need to write a full academic paper with thorough back-testing going back over every monthly period over the past 100 years to prove either one of us right or wrong. It is a generally safe bet that the share market will grow your wealth when you are in accumulation phase if you have a long enough time horizon. But all I am trying to point out is that its far less certain that share market in retirement can give people both money to live and maintain your capital against inflation at the same time. 2) I already gave a detailed explanation about total return and ignoring dividends. Being that however from you receive your returns you need some money annually to live on if you are retired and its generally accepted within the financial sphere (based on various academic papers, etc) that 3 -5% is the safe withdrawal rate for equities in general (of course it doesn't apply 100% of the time). It just so happens that on average dividend yields in Australia average 3 - 5% in most years plus some franking credits so the dividends paid approximate the safe withdrawal rate of money you can draw down. Therefore as a rule of thumb the dividends over time approximate the amount of money you can safely withdraw and therefore we have to see if the remainder of the money (i.e. the capital) manages to at least match inflation. You can choose to invest all the money in an asset such as Berkshire Hathaway which pays no dividend and sell 3 -5% of your shares each year, etc. Either way you need a certain amount of money to live and we have to see if the remainder of the money at least stays intact against inflation. Ideally a sound investment should give you enough to live plus maintain itself against inflation. Hence given the above as a short hand if you are looking at the Australian stock market I would say total return is the figure to look at for people in accumulation phase and price return is the more relevant figure to benchmark for retirees (because you assume dividends get spent). [/QUOTE]

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