Market volatility can be unsettling at any stage-experts consider the five years before and after retirement the most vulnerable period for retirees. This vulnerability is known as “sequence of return risk”, which occurs when large market losses hit early in retirement, potentially reducing a portfolio’s ability to recover and increasing the risk of outliving your savings.
For example, a retiree with $1 million fully invested in equities in 2000 saw sharp early losses that were difficult to recoup, especially while making withdrawals. Despite eventual market recovery, the damage from early losses lingered.
That’s why our RiskFirst® Process focuses on proactively managing downside risk-especially during this critical window. By prioritizing risk management over return chasing, we aim to help protect your portfolio and stay on track with your long-term retirement goals.
Retirees Red Zone
How Sequence of Return Risk Could Hit a Theoretical Retirees Portfolio
- We believe the preservation of capital is key to consistent, long-term investment success.
- Our investment approach is grounded in economic theory and backed by quantitative analysis.
- Managing drawdown risk is a pillar from which we build our portfolios.
60-Second Breakdown: March 31, 2025
Redwood Senior Analyst Michael C. Sasaki, CFA® discusses recent market performance and explains this week’s chart.
Best Invest Advise EVER!
Bryan Bourgeois, CEO/Founder of Shorebreak Capital, discusses why 90% of investors fail and how to avoid these common investment mistakes with Conner Small, Partner at Redwood Investment Management, Shorebreak Capital’s dedicated asset manager.
