HOW Are You at Timing the Stock Market?
Sequence of Returns risk is the unknown timing of stock market ups and downs.
The risk starts when you retire or when you start using your investments as income.
In the chart below you’ll see S&P stock returns from 2001-2020, and in reverse order. When you start spending your investments, Sequence of Returns becomes a RISK, you may run out of money!
The good news, you can establish a “buffer fund” to spend when the stock market is on the downturn. The buffer fund should not be invested in the stock market. Cash-value life insurance and Annuities are good buffer funds.