Book A Meeting
About Me
Subscribe
MoontowerMeta Public Notion/
🔖
Guides To Reading I Enjoyed/
InvestResolve Masterclass On Risk Parity
InvestResolve Masterclass On Risk Parity/
The Impact Of Sequence Of Return Risk And How To Minimize It

The Impact Of Sequence Of Return Risk And How To Minimize It

 
podcast link including transcript: https://investresolve.com/podcasts/the-impact-of-sequence-of-returns-risk-and-how-to-minimize-it-podcast/
 

Key Takeaways

 
Discussion of sequence of return risk
US survivorship bias
  • Long-term average returns above cash:
    • US: 5.5%
    • Foreign: 3.5%
    • Blended: 4.2%
      •  
      Standard dev is about 2%
 
  • The averages hide relative performance and variance that can occur from decade to decade. Proper diversification reduces the timing risk that can occur if your portfolio is overly concentrated or loaded to a small number of risk factors as you approach retirement or a period of withdrawals.
 
Â