Simulator for Comparison Withdrawing Between a SPY/Cash Portfolio And An ALL SPY One With Hypothetical Return Data

I have researched on whether we would be broke, retiring right before the 2000 and 2008 financial crises if we withdraw 4% every  year from a all IVV portfolio, the answer is that we would not. We would actually be richer after some years. Details are in this article.

I also made a simulator for withdrawing 4% annually from a pure SPY portfolio, you can play with it. The simulator is here.

Now, I want to find out whether a cash-SPY portfolio is better than a full SPY portfolio.

Why cash?

I use cash for asset allocation because cash return standard deviation is 0. meaning there do no risk. Cash has no return correction with stock. Stock price fluctuation dose not affect cash return.

Therefore, cash is a good proxy for short term bond in this scenario.

simulator

SPY daily return mean and standard deviaion is derived from all daily closing prices from 1993/1/29 to 2022/2/5. The annual return mean is daily mean return times 252, while its standard deviaiton is the daily one times square root of 252. Assuming there are 252 trading days. Math proof is here.

This simulator takes SPY daily return mean and standard deviation and assumes cash return is 0, cash return with SPY return has no correction. 

Assign ratio of SPY and click on "Run" to see if a 100% SPY portfolio runs out of fund faster than a cash allocated one.

SPY Ratio: %
Cash Ratio: %
Withdrawal Rate: %

• SPY theoretical annually return mean: 11.592%
• SPY theoretical annually return standard deviation: 18.716%
• Porfolio heoretical annually return mean: %
• Porfolio heoretical annually standard deviation: %
• SPY Porfolio Current Value $1000
• Cash-SPY Porfolio Current Value: $1000