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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
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Author: rayvt ✧🐝  😊 😞
Number: of 15062 
Subject: Re: Have about 2.5 years of cash left for expenses
Date: 07/10/2023 4:57 PM
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No. of Recommendations: 14
the dreaded (but not real) "sequence of return risk" category

Do you mind elaborating on this Jim?

I'm not Jim, but it goes like this:
Every day is the first day of the rest of your life, and
every year is the first year of the lifetime of our portfolio.

The people who worry about "sequence of return risk" are thinking that the first year of retirement is the only year of concern.

What's the difference between a 30% loss in the 1st year of retirement and a 30% loss in the 20th year of retirement? None. The year after the loss is the first year of the rest of your portfolio. There is nothing special about the first year.

Where the sequence of return risk is actually important is when you retire on a shoestring and a large loss will drop the portfolio value below the "safe" level. So don't retire with barely enough money.
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