Sequence of Returns Risk is Much Higher than you think and Likely to Happen During your Retirement.

The risk that a retiree will encounter a sequence of negative returns event at some point during their retirement is much higher than most investors realize. In this video I show the likelihood that a retiree will encounter a sequence of negative returns event at some point in their retirement. Few investors consider sequence of returns risk when investing their portfolio and choose an asset allocation based upon one year volatility assumptions. This approach is flawed. If you don't consider sequence of returns risk, you will be caught off guard when it happens and more likely to sell because you are losing more money than you ever expected. In this video I review techniques for protecting your retirement against sequence of negative returns event risk.
This video is for educational and illustrative purposes and is not financial advice. The index illustrations used in the video are hypothetical. Your broker or advisor will charge you fees or commissions to make investments and therefore your returns will be less than indexes. For example, if you invest in the S&P 500 ETF, SPY, you will pay a fee to the company managing the ETF, State Street Global Advisors. Your return on the S&P 500 ETF, SPY, will be less than the S&P 500 Index TR because of the fee paid to State Street Global Advisors. Consult your advisor or broker for a detailed list of their fees or commissions before you invest. Investing involves risk and you can lose money.