Ill-timed market crashes can mangle plans for retirement

November 15, 2016

Damien McIntyre has been quoted in an AFR article focused on the impact that sequencing risk can have on investors, especially those close to retirement:

‘Damien McIntyre, director, Grant Samuel Funds Management, says sequencing risk could be particularly high at the moment.

“Equities have experienced a bull market since the end of the financial crisis. More recently there have been signs this is coming to an end. Returns have been sluggish and central bank actions to stimulate economies are generally falling flat,” Mcintyre says.

It is easy to assume the way to avoid sequencing risk is to sell down growth assets and revert to cash. But exiting higher growth assets in or near retirement lowers the fund’s ability to meet members’ income needs for their entire life.

McIntyre says despite the risk of volatility in equity markets, retirees need investments in growth assets, even investors who only want income not capital growth.’

To read the article, click here.

 

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