Unfortunately, the financial advisory industry is plagued with cookie-cutter formulas like the so called 4% rule, which is based off of statistical samples of historical returns to help create a withdrawal plan for retirees.  The problem with these types of generic solutions is that the historical returns may or may not be relevant whatsoever towards predicting future returns.  Case in point, since the 1980’s interest rates have sloped substantially downwards, which has been hugely beneficial to both fixed income and equity returns.  With rates being as low as they can possibly go and nowhere to go but up, those historical returns on a 50/50 stock and bond portfolio are pretty much worthless from that 30 year historical period.  The problem is that financial advice is complicated and dynamic, but the barriers of entry to those that can give it are fairly low, leading to a lot of garbage that must be filtered out.  I’d recommend a dynamic approach where the allocation is adjusted based on valuations and objectives, as opposed to solely on age.  There are strategies outside of just being long stocks or long bonds, which can also work well such as selling covered calls and cash secured puts.  These strategies don’t expose investors to the same interest rate risks that the cookie-cutter model is riddled with.  Below is the article but I don’t see a whole lot of value in the commentary.

 

http://online.barrons.com/article/SB50001424053111903747504579177903984944392.html?mod=BOL_hp_highlight_2#articleTabs_article%3D1