No. of Recommendations: 4
"And the reason for the 10% in short-term governments is that if there's a terrible period in the market and she's withdrawing 3% or 4% a year you take it out of that instead of selling stocks at the wrong time."
My question is without looking in the rear view mirror, how do you know when you're in a terrible period...a down month, 2 months? When do you switch to the 'reserve tank' from the main?
Sounds elementary, but i believe its a reasonable question. If every time the market squiggled and you tap reserves, you'll need to refill the reserve tank, hence forced selling at some random point.
Sept 11, Covid, '09 banking crisis are obvious...but other normal squiggles are just that.
m
