My Million Dollar Retirement Portfolio after four months

I wrote a post entitled "Fisher Investments Canada 15 Minute Retirement Plan." I had read the Fisher brochure of the same name and disagreed with it. Disagreeing was easy but was I right in disagreeing? Could I do better? I decided to find out.

That was a little more than four months ago. I designed my own Million Dollar Portfolio based on what I had read in the Fisher brochure. Today I am up $148,750.39 and I've withdrawn $3,330 each month to emulate the money a retiree would require in order to live.

I am using the Portfolio Manager software supplied by TD Waterhouse. It is specifically designed to allow one to test their personal investment theories. If you are interested, here is the report. Click on the image, you will see the whole, uncropped image. Tap the three keys (Shift and Control and +/=) and do this all at once. The image should enlarge.

I know: "Past performance is not indicative of future results." But, it does give one a buffer. That is a fact. A nasty bear market may cut 25% from a portfolio's value--maybe even more. Clearly it is better to enter the bear market with more rather than less.

If such a catastrophe should befall my portfolio tomorrow, I would expect to bottom out at around $875,000. That's the bad news. The good news is that my income should not get cut by more than 15%. I would still see a dividend income of $31,300. 

I did the math and I should be able to invest about $26,460 in the bear market, one must take advantage of the sale on investments, and still be keep ample cash to cover the shortfall for the next four years. 

With some luck, when the bear market lumbers off, my Million Dollar Retirement Portfolio might actually be able to deliver on its 4% promise. If not, I may well still have a little cash to cover some shortfalls in the following years.

My little test has shown one thing, when you get into the market is important. In other words, luck is important. What puzzles me is this: a big firm like Fisher can, to a certain extent, make its own luck. It can under promise and then meet its self-set easy goals. Clients would be happy and Fisher would have added investment room when compared to a single investor like me.

My gut fear is that financial advisors are tempted to skim off the extra profits generated by bull markets for themselves and pass the losses of the bear markets on to the clients. I knew an advisor once who loved black and white and only black and white. Heck, even his huge, backyard pool was black with white accents. Being so addicted to fashion demanded a lot of green and this financial advisor did not seem to want in that area. My bet is not one of his clients had a pool coordinated to their favourite colour.