With sequence risk, you may earn a lower return in retirement than you had planned. Here’s how it impacts you in your retirement years.
TAG Advisory Services's InsightRead Original Article
Retail investors have lately been demonstrating a preference for passive management instead of active management over the negative perception of management fees and their actual added value to investors. In light of this while also being cognizant of the fact that most clients have certain liquidity requirements for their portfolios, it is more important than ever for advisors to consider sequence risk in the context of active management and its impact on client portfolio returns. But what exactly is sequence risk, and what role does the economy play in magnifying the impact of such a risk? In this article, the author breaks down in layman’s terms the critical components of sequence risk for a retirement portfolio and discusses basic measures of mitigating this.