Sequence Risk

When American billionaire investor Kenneth Fisher said, “Time in the market beats timing the market,” he highlighted the general upward trend in equity prices over the long term. This wisdom, however, assumes investors have the luxury of riding out market fluctuations – a luxury not afforded to retirees who are actively drawing down on their savings.

In his latest article, Talaria’s Co-Chief Investment Officer Chad Padowitz examines the concept of “sequencing risk” – a problem created when the order and timing of returns clashes with the need to regularly draw monies out of a portfolio. Through real-world examples, Chad illustrates how the sequence of returns alone can dictate how long retirement savings can last, and he explores strategies to mitigate this risk for retirees.