$2,500 a month starts at 6% a year.
Does adding 25% SMH improve a QQQ retirement portfolio?
Strategy in short: Hold 75% QQQ and 25% SMH. Rebalance to those weights every month.
Retirement answer: 75% QQQ / 25% SMH supported more starting spending than Always QQQ: 3.1% versus 2.8% a year funded 30 years in at least 95% of both sets of histories. These are historical thresholds, not recommended spending.
Return comparison: 75% QQQ / 25% SMH made more money in this backtest. 75% QQQ / 25% SMH ended with $119,111 and Always QQQ with $93,318.
Growth of $10,000 — logarithmic scale
75% QQQ / 25% SMH had a deepest fall of 79.6%, compared with 79.7% for Always QQQ.
See what changed when 25% moved from QQQ to SMH
The portfolio replaces one quarter of QQQ with a narrower semiconductor fund and restores that split every month.
The allocation was restored on its scheduled rebalance dates. The strategy's deepest fall was 79.6%, compared with 79.7% for Always QQQ.
75% QQQ / 25% SMH$119,111-79.6% deepest fall
Always QQQ$93,318-79.7% deepest fall
July 2000 through June 2026. Distributions are reinvested. The calculation charges 0.10% of each risky asset bought or sold. There are no withdrawals in this graph. Equal percentage moves take equal vertical space. Past results do not predict future results.
Did the semiconductor sleeve support more monthly spending?
By July 2006, Always QQQ had run out while 75% QQQ / 25% SMH still had $1,266.
Avoiding more of the earlier losses left money available to keep paying withdrawals.
Example: You have $500,000 and need $2,500 a month—6% a year.
One year of the same spending exceeded everything left in the portfolio.
The portfolio had run out of money.
What funded at least 95% of both history tests?
75% QQQ / 25% SMH supported a 3.1% starting annual withdrawal for 30 years: 298 ordered starts and 4,768 of 5,000 mixed histories funded every withdrawal.
These are historical thresholds, not recommended spending amounts or a promise of future success.
Test if 75% QQQ / 25% SMH can fund your early retirement with your own numbers
Enter your portfolio, monthly spending, and how long the money needs to last.
$2,500 a month for 30 years starts at 6.0% of the portfolio each year.
In these backtests, sometimes. Neither strategy funded this early retirement in at least 8 out of 10 histories tested.
312 starting months; the fund's record repeats in order when needed
- 75% QQQ / 25% SMH
- 223 funded
- Always QQQ
- 202 funded
5,000 histories built from 8–12-year pieces
- 75% QQQ / 25% SMH
- 4,216 funded
- Always QQQ
- 4,363 funded
A path funded the goal only if it paid every inflation-adjusted monthly withdrawal for 30 years. Results use the nearest 0.1 percentage-point starting withdrawal rate. They reuse one 26-year market record and are not a probability about your future.
How the FIRE calculator works
The calculator applies the portfolio value, monthly withdrawal, and number of years you enter. The first withdrawal occurs before the first month's return, and later withdrawals rise with U.S. inflation. A history counts as funded only if it pays every monthly withdrawal for the full period and finishes above zero.
One result begins at each of the 312 months in the fund record and follows that record forward in order, returning to its first month when more months are needed. The other builds 5,000 longer histories from linked 8-, 10-, and 12-year pieces of the same record. The calculation charges 0.10% whenever QQQ and SMH is bought or sold and excludes personal tax.
At every repeated or rearranged join, market signals use the real observations that preceded the incoming historical month. Portfolio value, withdrawals, inflation and strategy state continue without resetting.
Strategy in detail
Hold 75% QQQ and 25% SMH. Rebalance to those weights every month.
QQQ already owns large technology companies. Adding SMH increases exposure to the semiconductor cycle rather than adding a separate defensive asset.
Can I trust these results?
My evidence-weighted estimate is about 55% that the main effect would persist in a new long market period. That makes the result plausible, not dependable enough to treat as a promise.
The direct test covers July 2000 through June 2026. It includes fund distributions, T-bill returns, inflation and the stated trading costs, but it is still one U.S. market record. The longer retirement histories repeat it or link 8–12-year pieces; they test difficult orders, not new historical evidence.
Treat the result as evidence about how the rule behaved, then compare it with simpler alternatives and your own ability to follow it through a bad period.
Methodology details for the nerds
How I ran the return comparison
The test starts with the amount shown on the graph. Each decision uses only information already complete at that month-end. Distributions are reinvested, T-bills earn the published three-month rate, and the calculation charges 0.10% of each risky asset bought or sold.
How I tested retirement withdrawals
The first withdrawal occurs before the first month's return. Spending then rises with U.S. inflation. One panel checks every starting month in order; the other links 5,000 histories from 8-, 10-, and 12-year pieces. A path counts only if it pays every withdrawal and remains above zero.
Data and important limits
The calculation uses adjusted fund returns plus U.S. government T-bill and inflation data. Personal tax, spreads beyond the stated cost, and investor behavior are not included. A real fund can differ from its index because of fees and tracking.
Keep comparing
See where this strategy ranks.
Use this result
See how much you need to retire—and compare what to invest in.
Enter what you have and what you want to spend each month. Compare three portfolios against the same market history. Your financial figures stay in your browser.
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