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Distribution Phase Of The 60/40 MDY/VUSTX Portfolio.

|Includes:SPDR S&P MidCap 400 ETF (MDY)

This post summarizes a calculation for 60/40 MDY/VUSTX portfolio starting on Jan. 1, 2000. The portfolio is re-balanced at the beginning of every year after withdrawal which is made at the beginning of the year according to the following schedule: 4% on the first day of the first year, with the dollar amount increasing by 4% every year thereafter.

The first table lists the adjusted close data obtained from Yahoo Finance, and the returns of the components as well as of the portfolio.

Year

MDY on 12/31

VUSTX on 12/31

Return MDY (%)

Return VUSTX (%)

Return 60/40 (%)

1999

69.35

4.15

     

2000

81.52

4.97

17.55

19.76

18.43

2001

80.83

5.19

-0.85

4.43

1.26

2002

69.09

6.06

-14.52

16.76

-2.01

2003

93.46

6.22

35.27

2.64

22.22

2004

108.32

6.67

15.90

7.23

12.43

2005

121.89

7.11

12.53

6.60

10.16

2006

134.06

7.24

9.98

1.83

6.72

2007

143.74

7.91

7.22

9.25

8.03

2008

91.37

9.7

-36.43

22.63

-12.81

2009

125.69

8.53

37.56

-12.06

17.71

2010

158.72

9.27

26.28

8.68

19.24

2011

155.35

11.98

-2.12

29.23

10.42

2012

183.03

12.4

17.82

3.51

12.09

2013

243.54

10.78

33.06

-13.06

14.61

Click to enlarge

In this table we summarize the growth of the portfolio with the withdrawals made as described above.

Year

Withdrawal

Portfolio Value After Withdrawal

Return (%)

Portfolio Value at End of the Year

1999

     

100

2000

4.00

96.00

18.43

113.70

2001

4.16

109.54

1.26

110.92

2002

4.33

106.59

-2.01

104.45

2003

4.50

99.95

22.22

122.16

2004

4.68

117.48

12.43

132.09

2005

4.87

127.22

10.16

140.14

2006

5.06

135.08

6.72

144.16

2007

5.26

138.90

8.03

150.05

2008

5.47

144.58

-12.81

126.06

2009

5.69

120.37

17.71

141.69

2010

5.92

135.77

19.24

161.89

2011

6.16

155.73

10.42

171.95

2012

6.40

165.55

12.09

185.57

2013

6.66

178.91

14.61

205.05

Click to enlarge

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Stocks: MDY