qanda

Q: What do you think of an all-equity portfolio for funding a charitable trust?


Q:  I have followed your ultimate buy-and-hold portfolio for a long time – thank you! My wife and I have been fortunate in our lives, and we will be able to leave a nice amount to a foundation or donor-advised-fund (“DAF”), to fund charities with annual donations in perpetuity. I want to give the trust company or DAF the instruction to hold the ultimate buy-and-hold portfolio.  

 

The mandate will be: withdraw 5% of the corpus each year to make contributions (no inflation adjustment). Since we are dealing with funding charities, as opposed to funding our own living expenses, it seems that the portfolio can tolerate an occasional large drawdown. It also seems that our best bet for growing the corpus into “perpetuity” is to use the 100% equity mix, recognizing that there will be the occasional bear market year when the charities will get a smaller donation than in the prior year. Could you comment on this?