In the case of Apple, it saw its shares split multiple times over its listed history: two for one in each of 1987, 2000 and 2005, and seven for one in 2014 (a 56-fold increase overall).
So, the first part of the explanation for inevitable unit depletion being a fallacy is that it is possible to keep selling units (or fractions of units) and never run out.
However, for investors living off their portfolios to do so successfully does require the second part of the explanation: the value of the units/shares need to grow in price to support future withdrawals from the portfolio.
Once again, our Forrest example, an admittedly extreme example, demonstrates the power of capital growth in protecting capital.
The 500 shares he sold at the end of 2017 would have netted him a cool $84,615 (£66,205) at the time, based on the share price of $169.23 per share. And his 141,500 remaining shares would have been worth almost $24m at the end of 2017.
None of this should blind investors and advisers to the importance of income generated by portfolios. Dividends, bond coupons and interest are an extremely important source of long-term returns.
But, at the same time, investors and advisers should not ignore the importance of capital growth when designing long-term investment portfolios.
Instead, advisers need to work with clients to understand any biases they may have around selling units if necessary, and to limit the perverse effects of these biases as much as possible so that they can deliver the combination of income and capital growth likely to maximise the risk adjusted total return of client portfolios, and so maximise the chance of meeting client financial goals.
Nic Spicer is portfolio manager and UK head of research at PortfolioMetrix
