Safe Withdrawal Rate for your Investment Portfolio with Python

In 1999, a study was published detailing the effects of a range of nominal and inflation-adjusted withdrawal rates on investment portfolios for payout periods up to 30 years. Within finance, investment advising and retirement planning this study is informally known as the Trinity Study.

The study suggests that portfolios of at least 75% stocks provide a 4% to 5% inflation-adjusted withdrawal. In other words, if you have a portfolio of $1 million, you can withdraw annually $40.000 to $50.000 adjusted for inflation without the risk of running out of money, at least, for the coming 30 years.

After reading this study, I was inspired to extend the work of this paper. As a result, I have written a python script that follows the methodology described in this study to determine a sustainable withdrawal rate for any investment portfolio (assuming that there is sufficient historical data).

This article is comprised of the following sections, first, I will explain the data and methodology. Second, I will elaborate on the Python implementation and explain how to use it. Lastly, a conclusion is presented regarding the determination of a safe withdrawal rate.

Data and Methodology

In order to determine a sustainable withdrawal rate, the study used a ratio called the portfolio success rate. This ratio is used to compare all the portfolio compositions with different withdrawal rates and payout periods. The portfolio success rate, is defined as the number of portfolio successes divided by the number of simulations. A portfolio is considered a success if it completes the payout period with an end of period value greater than or equal to zero.

The data used in the study were the total monthly returns of the Standard & Poor’s 500 Index and the Salomon Brothers Long-Term High-Grade Corporate Bond Index. Total monthly return is the actual return of an investment for a given period, this includes interest, capital gains, dividends and distributions.

Using these historical total monthly returns, simulations are derived by using an overlapping years method for different payout periods. This method is elaborated in the figure below:

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Safe Withdrawal Rate for your Investment Portfolio with Python
Ray  Patel

Ray Patel

1619518440

top 30 Python Tips and Tricks for Beginners

Welcome to my Blog , In this article, you are going to learn the top 10 python tips and tricks.

1) swap two numbers.

2) Reversing a string in Python.

3) Create a single string from all the elements in list.

4) Chaining Of Comparison Operators.

5) Print The File Path Of Imported Modules.

6) Return Multiple Values From Functions.

7) Find The Most Frequent Value In A List.

8) Check The Memory Usage Of An Object.

#python #python hacks tricks #python learning tips #python programming tricks #python tips #python tips and tricks #python tips and tricks advanced #python tips and tricks for beginners #python tips tricks and techniques #python tutorial #tips and tricks in python #tips to learn python #top 30 python tips and tricks for beginners

Ray  Patel

Ray Patel

1619510796

Lambda, Map, Filter functions in python

Welcome to my Blog, In this article, we will learn python lambda function, Map function, and filter function.

Lambda function in python: Lambda is a one line anonymous function and lambda takes any number of arguments but can only have one expression and python lambda syntax is

Syntax: x = lambda arguments : expression

Now i will show you some python lambda function examples:

#python #anonymous function python #filter function in python #lambda #lambda python 3 #map python #python filter #python filter lambda #python lambda #python lambda examples #python map

Art  Lind

Art Lind

1602968400

Python Tricks Every Developer Should Know

Python is awesome, it’s one of the easiest languages with simple and intuitive syntax but wait, have you ever thought that there might ways to write your python code simpler?

In this tutorial, you’re going to learn a variety of Python tricks that you can use to write your Python code in a more readable and efficient way like a pro.

Let’s get started

Swapping value in Python

Instead of creating a temporary variable to hold the value of the one while swapping, you can do this instead

>>> FirstName = "kalebu"
>>> LastName = "Jordan"
>>> FirstName, LastName = LastName, FirstName 
>>> print(FirstName, LastName)
('Jordan', 'kalebu')

#python #python-programming #python3 #python-tutorials #learn-python #python-tips #python-skills #python-development

Art  Lind

Art Lind

1602666000

How to Remove all Duplicate Files on your Drive via Python

Today you’re going to learn how to use Python programming in a way that can ultimately save a lot of space on your drive by removing all the duplicates.

Intro

In many situations you may find yourself having duplicates files on your disk and but when it comes to tracking and checking them manually it can tedious.

Heres a solution

Instead of tracking throughout your disk to see if there is a duplicate, you can automate the process using coding, by writing a program to recursively track through the disk and remove all the found duplicates and that’s what this article is about.

But How do we do it?

If we were to read the whole file and then compare it to the rest of the files recursively through the given directory it will take a very long time, then how do we do it?

The answer is hashing, with hashing can generate a given string of letters and numbers which act as the identity of a given file and if we find any other file with the same identity we gonna delete it.

There’s a variety of hashing algorithms out there such as

  • md5
  • sha1
  • sha224, sha256, sha384 and sha512

#python-programming #python-tutorials #learn-python #python-project #python3 #python #python-skills #python-tips

How To Compare Tesla and Ford Company By Using Magic Methods in Python

Magic Methods are the special methods which gives us the ability to access built in syntactical features such as ‘<’, ‘>’, ‘==’, ‘+’ etc…

You must have worked with such methods without knowing them to be as magic methods. Magic methods can be identified with their names which start with __ and ends with __ like init, call, str etc. These methods are also called Dunder Methods, because of their name starting and ending with Double Underscore (Dunder).

Now there are a number of such special methods, which you might have come across too, in Python. We will just be taking an example of a few of them to understand how they work and how we can use them.

1. init

class AnyClass:
    def __init__():
        print("Init called on its own")
obj = AnyClass()

The first example is _init, _and as the name suggests, it is used for initializing objects. Init method is called on its own, ie. whenever an object is created for the class, the init method is called on its own.

The output of the above code will be given below. Note how we did not call the init method and it got invoked as we created an object for class AnyClass.

Init called on its own

2. add

Let’s move to some other example, add gives us the ability to access the built in syntax feature of the character +. Let’s see how,

class AnyClass:
    def __init__(self, var):
        self.some_var = var
    def __add__(self, other_obj):
        print("Calling the add method")
        return self.some_var + other_obj.some_var
obj1 = AnyClass(5)
obj2 = AnyClass(6)
obj1 + obj2

#python3 #python #python-programming #python-web-development #python-tutorials #python-top-story #python-tips #learn-python