Back in our February 2018 commentary (“Just Keep Swimming”), we briefly discussed the risks of market downturns for people nearly or recently retired. The main danger we identified was called sequence of returns risk. As some of our readers approach retirement, they may wonder: what is this risk and how should they protect from it?
A spate of recent think-pieces, news segments, and even a forthcoming documentary film have popularized an internet subculture called the “FIRE” movement (which stands for “Financial Independence, Retire Early”). In a nutshell, FIRE is about achieving financial independence earlier in life via extreme frugality and accelerated retirement savings. Its adherents (typically Millennials) report saving as much as 50-70% of their gross income each year, in a bid to accelerate the point at which their investment portfolio can support their modest annual income needs, freeing them from traditional work obligations.
Dory, a character created by Pixar Animation and played by Ellen DeGeneres in the movie Finding Nemo, is a wide-eyed, blue tang fish who suffers from short-term memory loss. At one point in the movie, she finds herself lost and gets out of trouble by not panicking and telling herself to just keep swimming.