Tag: sequencing

This month’s Wealth Pipeline continues our discussion on mitigating sequencing risk. Specifically, we focus on the art of investment portfolio construction and the use of absolute return/capital preservation funds, fixed interest, low correlation assets and international securities.

Sequencing risk is the risk of receiving the worst returns in their worst order. Conventional wisdom assumes that retirees and those relying on investment income are solely affected by sequencing risk. However, sequencing risk also affects wealth accumulators as they continuously and frequently contribute capital after the initial investment has been made. The idea of sequencing risk contrasts with the principle that time in the market heals all wounds.