{"id":176781,"date":"2025-04-08T04:40:07","date_gmt":"2025-04-08T04:40:07","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/finance\/how-to-avoid-comparing-against-your-all-time-high-portfolio-value-my-money-blog\/"},"modified":"2025-04-08T04:40:07","modified_gmt":"2025-04-08T04:40:07","slug":"how-to-avoid-comparing-against-your-all-time-high-portfolio-value-my-money-blog","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=176781","title":{"rendered":"How to Avoid Comparing Against Your All-Time High Portfolio Value \u2014 My Money Blog"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div>\n<p><a href=\"https:\/\/amzn.to\/4200soh\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.mymoneyblog.com\/wordpress\/wp-content\/uploads\/2025\/04\/rethinkingbook.gif\" alt=\"\" width=\"350\" height=\"482\" class=\"aligncenter size-full wp-image-82893\" \/><\/a><\/p>\n<p>A common question about of the \u201c4% rule\u201d is, well, 4% of what?   People like to anchor themselves to the all-time high value of their portfolio, but we can see from recent events that can be a shaky idea.    I believe that you should always be prepared for stocks to fall by 50%, which means you could be taking 4% of two very different values.    Folks shouldn\u2019t act like they \u201clost $XX,XXX\u201d when their stocks drop from an arbitrary all-time high, and they shouldn\u2019t plan out the next 30 years of retirement income based on a single value either.<\/p>\n<p>I\u2019m currently reading the new book <a href=\"https:\/\/amzn.to\/4200soh\" target=\"_blank\">Rethinking Investing: A Very Short Guide to Very Long-Term Investing<\/a> by Charles Ellis.   He\u2019s been in the industry a long time, but may be best known for his bestselling book <a href=\"https:\/\/amzn.to\/4lhNQjV\" target=\"_blank\">Winning the Loser\u2019s Game<\/a>, first published in 1985.<\/p>\n<p>In the book, Ellis proposed a potentially better way to set your Spending Rule in retirement.  It\u2019s not based on the most recent value of your portfolio, and definitely not the all-time high of your portfolio.    Instead, he wants you to use the rolling average over the last 5-7 years.  Then, you can add the 4% rule (or whatever).<\/p>\n<blockquote>\n<p>In designing your own spending rule, first, average the year-end values of your assets over the prior several years (preferably more than five years) to dampen the impact of market fluctuations. Next, calculate what would be a prudent withdrawal of the averaged assets\u2014likely 4\u20135%\u2014to determine what dollar amount you can prudently withdraw from your current portfolio each year to cover some of your expenses.<\/p>\n<\/blockquote>\n<p>This has the effect of smoothing out your annual withdrawals:<\/p>\n<blockquote>\n<p>Averaging your assets over multiple years makes the funds available for your spending far more consistent and predictable. If, for example, you settle on a 5% rate of withdrawal and a six-year moving average of the year-end value of your assets, a 30% drop in the stock market would lead to only a 5% reduction in your payout that year (and much of that reduction likely would be provided by your consistent dividend income).<\/p>\n<\/blockquote>\n<p>(Side note: This supports the idea of me tracking my <a href=\"https:\/\/www.mymoneyblog.com\/category\/goals\" target=\"_blank\">consistent dividend income<\/a>\u2026)<\/p>\n<p>Let\u2019s take a look at Vanguard LifeStrategy Growth Fund (<a href=\"https:\/\/www.morningstar.com\/funds\/xnas\/vasgx\/chart\" target=\"_blank\">VASGX<\/a>), an all-in-one fund that is diversified similarly to their Target Date Retirement Funds, but a handy benchmark since it is a constant 80% stocks\/20% bonds.   Here\u2019s a Growth of $10,000 chart for the last 5 years ending 4\/4:<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.mymoneyblog.com\/wordpress\/wp-content\/uploads\/2025\/04\/vasgx_2504.gif\" alt=\"\" width=\"720\" height=\"531\" class=\"aligncenter size-full wp-image-82895\" \/><\/p>\n<p>Instead of seeing that you are about 11% off your all-time high value of about $18,300, you might appreciate that you are still above January 2024 levels, and that your 5-year rolling average of year-end values is about $15,400.    If you based your 4% withdrawal rate on that value, you would be much calmer now.<\/p>\n<p>I like this strategy, and I believe it should be applied even when you are still accumulating for retirement.   Don\u2019t anchor yourself the all-time high of your portfolio and make it your new \u201cIf it ever goes below this, I\u2019ll be sad!\u201d value.   Instead, mentally track a rolling average of your net worth.   I\u2019ll look to add this concept to my portfolio updates, hopefully it\u2019ll reduce my stress levels during volatile times.<\/p>\n<p>Finally, Ellis points out another potential benefit:<\/p>\n<blockquote>\n<p>Importantly, by following such a Spending Rule, you are then free to concentrate on achieving significantly higher long-term returns without the need to be overinvested in bonds. Stabilizing the investor\u2019s income with a responsible Spending Rule frees the investment portfolio to invest more in equities and produces, over time, a higher and more rapidly rising portfolio value and income stream.<\/p>\n<\/blockquote>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>A common question about of the \u201c4% rule\u201d is, well, 4% of what? People like to anchor themselves to the all-time high value of their portfolio, but we can see from recent events that can be a shaky idea. I believe that you should always be prepared for stocks to fall by 50%, which means [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":176782,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[93],"tags":[22865,11395,3767,17906,1521,832,9162],"dealstore":[],"offerexpiration":[],"class_list":["post-176781","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-alltime","tag-avoid","tag-blog","tag-comparing","tag-high","tag-money","tag-portfolio"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How to Avoid Comparing Against Your All-Time High Portfolio Value \u2014 My Money Blog - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=176781\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to Avoid Comparing Against Your All-Time High Portfolio Value \u2014 My Money Blog - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"A common question about of the \u201c4% rule\u201d is, well, 4% of what? People like to anchor themselves to the all-time high value of their portfolio, but we can see from recent events that can be a shaky idea. I believe that you should always be prepared for stocks to fall by 50%, which means [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/fivemor.com\/?p=176781\" \/>\n<meta property=\"og:site_name\" content=\"Som2ny Network\" \/>\n<meta property=\"article:published_time\" content=\"2025-04-08T04:40:07+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/04\/vasgx_2504.gif\" \/>\n\t<meta property=\"og:image:width\" content=\"720\" \/>\n\t<meta property=\"og:image:height\" content=\"531\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/gif\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/fivemor.com\/?p=176781#article\",\"isPartOf\":{\"@id\":\"https:\/\/fivemor.com\/?p=176781\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\/\/fivemor.com\/#\/schema\/person\/b85e3c3dc0e1daea076524dc8810c371\"},\"headline\":\"How to Avoid Comparing Against Your All-Time High Portfolio Value \u2014 My Money Blog\",\"datePublished\":\"2025-04-08T04:40:07+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/fivemor.com\/?p=176781\"},\"wordCount\":616,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/fivemor.com\/#organization\"},\"image\":{\"@id\":\"https:\/\/fivemor.com\/?p=176781#primaryimage\"},\"thumbnailUrl\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/04\/vasgx_2504.gif\",\"keywords\":[\"AllTime\",\"Avoid\",\"Blog\",\"Comparing\",\"High\",\"Money\",\"Portfolio\"],\"articleSection\":[\"Finance\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/fivemor.com\/?p=176781#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/fivemor.com\/?p=176781\",\"url\":\"https:\/\/fivemor.com\/?p=176781\",\"name\":\"How to Avoid Comparing Against Your All-Time High Portfolio Value \u2014 My Money Blog - Som2ny Network\",\"isPartOf\":{\"@id\":\"https:\/\/fivemor.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/fivemor.com\/?p=176781#primaryimage\"},\"image\":{\"@id\":\"https:\/\/fivemor.com\/?p=176781#primaryimage\"},\"thumbnailUrl\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/04\/vasgx_2504.gif\",\"datePublished\":\"2025-04-08T04:40:07+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/fivemor.com\/?p=176781#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/fivemor.com\/?p=176781\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/fivemor.com\/?p=176781#primaryimage\",\"url\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/04\/vasgx_2504.gif\",\"contentUrl\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/04\/vasgx_2504.gif\",\"width\":720,\"height\":531},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/fivemor.com\/?p=176781#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/fivemor.com\/?bp_activities=1\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"How to Avoid Comparing Against Your All-Time High Portfolio Value \u2014 My Money Blog\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/fivemor.com\/#website\",\"url\":\"https:\/\/fivemor.com\/\",\"name\":\"Som2ny Network\",\"description\":\"Daily Deals\",\"publisher\":{\"@id\":\"https:\/\/fivemor.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/fivemor.com\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/fivemor.com\/#organization\",\"name\":\"Som2ny Network\",\"url\":\"https:\/\/fivemor.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/fivemor.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/07\/4a0953c4-logo-300x86-1.png\",\"contentUrl\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/07\/4a0953c4-logo-300x86-1.png\",\"width\":300,\"height\":86,\"caption\":\"Som2ny Network\"},\"image\":{\"@id\":\"https:\/\/fivemor.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/fivemor.com\/#\/schema\/person\/b85e3c3dc0e1daea076524dc8810c371\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/fivemor.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/729ae85bf62b9917e93538db2f2688ca?s=96&r=g&default=https%3A%2F%2Ffivemor.com%2Fwp-content%2Fplugins%2Fbuddypress-first-letter-avatar%2Fimages%2Fdefault%2F96%2Flatin_a.png\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/729ae85bf62b9917e93538db2f2688ca?s=96&r=g&default=https%3A%2F%2Ffivemor.com%2Fwp-content%2Fplugins%2Fbuddypress-first-letter-avatar%2Fimages%2Fdefault%2F96%2Flatin_a.png\",\"caption\":\"admin\"},\"sameAs\":[\"https:\/\/fivemor.com\"],\"url\":\"https:\/\/fivemor.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"How to Avoid Comparing Against Your All-Time High Portfolio Value \u2014 My Money Blog - Som2ny Network","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/fivemor.com\/?p=176781","og_locale":"en_US","og_type":"article","og_title":"How to Avoid Comparing Against Your All-Time High Portfolio Value \u2014 My Money Blog - Som2ny Network","og_description":"A common question about of the \u201c4% rule\u201d is, well, 4% of what? People like to anchor themselves to the all-time high value of their portfolio, but we can see from recent events that can be a shaky idea. I believe that you should always be prepared for stocks to fall by 50%, which means [&hellip;]","og_url":"https:\/\/fivemor.com\/?p=176781","og_site_name":"Som2ny Network","article_published_time":"2025-04-08T04:40:07+00:00","og_image":[{"width":720,"height":531,"url":"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/04\/vasgx_2504.gif","type":"image\/gif"}],"author":"admin","twitter_card":"summary_large_image","twitter_misc":{"Written by":"admin","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/fivemor.com\/?p=176781#article","isPartOf":{"@id":"https:\/\/fivemor.com\/?p=176781"},"author":{"name":"admin","@id":"https:\/\/fivemor.com\/#\/schema\/person\/b85e3c3dc0e1daea076524dc8810c371"},"headline":"How to Avoid Comparing Against Your All-Time High Portfolio Value \u2014 My Money Blog","datePublished":"2025-04-08T04:40:07+00:00","mainEntityOfPage":{"@id":"https:\/\/fivemor.com\/?p=176781"},"wordCount":616,"commentCount":0,"publisher":{"@id":"https:\/\/fivemor.com\/#organization"},"image":{"@id":"https:\/\/fivemor.com\/?p=176781#primaryimage"},"thumbnailUrl":"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/04\/vasgx_2504.gif","keywords":["AllTime","Avoid","Blog","Comparing","High","Money","Portfolio"],"articleSection":["Finance"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/fivemor.com\/?p=176781#respond"]}]},{"@type":"WebPage","@id":"https:\/\/fivemor.com\/?p=176781","url":"https:\/\/fivemor.com\/?p=176781","name":"How to Avoid Comparing Against Your All-Time High Portfolio Value \u2014 My Money Blog - Som2ny Network","isPartOf":{"@id":"https:\/\/fivemor.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/fivemor.com\/?p=176781#primaryimage"},"image":{"@id":"https:\/\/fivemor.com\/?p=176781#primaryimage"},"thumbnailUrl":"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/04\/vasgx_2504.gif","datePublished":"2025-04-08T04:40:07+00:00","breadcrumb":{"@id":"https:\/\/fivemor.com\/?p=176781#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/fivemor.com\/?p=176781"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/fivemor.com\/?p=176781#primaryimage","url":"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/04\/vasgx_2504.gif","contentUrl":"https:\/\/fivemor.com\/wp-content\/uploads\/2025\/04\/vasgx_2504.gif","width":720,"height":531},{"@type":"BreadcrumbList","@id":"https:\/\/fivemor.com\/?p=176781#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/fivemor.com\/?bp_activities=1"},{"@type":"ListItem","position":2,"name":"How to Avoid Comparing Against Your All-Time High Portfolio Value \u2014 My Money Blog"}]},{"@type":"WebSite","@id":"https:\/\/fivemor.com\/#website","url":"https:\/\/fivemor.com\/","name":"Som2ny Network","description":"Daily Deals","publisher":{"@id":"https:\/\/fivemor.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/fivemor.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/fivemor.com\/#organization","name":"Som2ny Network","url":"https:\/\/fivemor.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/fivemor.com\/#\/schema\/logo\/image\/","url":"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/07\/4a0953c4-logo-300x86-1.png","contentUrl":"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/07\/4a0953c4-logo-300x86-1.png","width":300,"height":86,"caption":"Som2ny Network"},"image":{"@id":"https:\/\/fivemor.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/fivemor.com\/#\/schema\/person\/b85e3c3dc0e1daea076524dc8810c371","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/fivemor.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/729ae85bf62b9917e93538db2f2688ca?s=96&r=g&default=https%3A%2F%2Ffivemor.com%2Fwp-content%2Fplugins%2Fbuddypress-first-letter-avatar%2Fimages%2Fdefault%2F96%2Flatin_a.png","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/729ae85bf62b9917e93538db2f2688ca?s=96&r=g&default=https%3A%2F%2Ffivemor.com%2Fwp-content%2Fplugins%2Fbuddypress-first-letter-avatar%2Fimages%2Fdefault%2F96%2Flatin_a.png","caption":"admin"},"sameAs":["https:\/\/fivemor.com"],"url":"https:\/\/fivemor.com\/?author=1"}]}},"_links":{"self":[{"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/posts\/176781","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=176781"}],"version-history":[{"count":0,"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/posts\/176781\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/media\/176782"}],"wp:attachment":[{"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=176781"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=176781"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=176781"},{"taxonomy":"dealstore","embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fdealstore&post=176781"},{"taxonomy":"offerexpiration","embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fofferexpiration&post=176781"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}