Sequencing risk is the risk that markets fall near or early in retirement. The value of investments falls as you need to draw it down for living expenses. Sequencing risk caused significant financial and emotional consequences to those who retired around 2007 at the time of the global financial crisis.
Stock market corrections historically occur every 4 1/2 to 5 1/2 years. From 1929 to current, the range of falls and duration has been 25% to 90% and duration of decline 22 to 160 weeks. The last correction occurred over 7 1/2 years.
The Gyrations risk model consider the implications of geopolitical, macroeconomic and company valuations on investor risk. Increased volatility is often experienced around key data releases relating to interest rates, growth, inflation rates, and key political events.
Our report details the investment landscape (in pictures) with dates of key upcoming data releases.
Risk managed equity funds protect against the effects of sequencing risk by at all times protecting the downside, ensuring the consequences of significant market falls do not materially adversely impact retirement lifestyle.