Despite all of the calculations involved in investing, there is still an element of luck involved. A specific term for this luck is, “Sequence of Returns.” What on earth is that? Answer: it is a risk and may be the most important concept in the world if a saver or investor ever wishes to spend their savings – and have those savings last.
The topic became relevant recently when a client asked me for assistance in defining what their “concerns” should be for the long-term now that they had accumulated a decent amount of savings and investments. The desire was to continue to accumulate savings and, more important, have the monies last at least long enough to see their plan to fruition for themselves and their kids.
