Balanced Portfolio for Retirement: Balanced portfolio inquiry

» darby43 - Balanced portfolio inquiry

Kirk -- In "Balanced Portfolio for Retirement" you calculate returns
on a hypothetical portfolio between 12/31/99 and 9/30/01. After doing the
math, you write:

"Thus after 21 months your $1M portfolio is down a mere 5.7% in a horrid
bear market! Losing 5.75% over 21 months in a total portfolio that is paying
you enough income to live AND suffered through one of the worst bear markets
on record short of the "Great Depression" is not worth losing sleep over."

However, your math doesn't show where the money comes from that is "paying
you enough to live on." In the first year, the portfolio only seems to yield
about $4,000 profit before rebalancing; in the second there's a net loss.
Where does the income come from?

-- posted by darby43