An Alternative Asset to Buffer Sequence-of-Return Risk in Retirement
Dirk Cotton, in the 2015 Spring issue of the Retirement Management Journal, notes that periodic spending from a retirement savings account is “path dependent.”1 Not only does the future value of the account depend on annual returns, but the order of those returns may have a significant effect on terminal portfolio value (TPV).
Sacks, Barry H.; Lafaye, Mary Jo; and Giordano, Shelley, "An Alternative Asset to Buffer Sequence-of-Return Risk in Retirement" (2016). Faculty Publications. 657.