The Sequence of Returns
Submitted by Ferguson Financial Inc. on July 23rd, 2018
A look at how variable rates of return do (and do not) impact investors over time.
Provided by Greg Ferguson
What exactly is the “sequence of returns”? The phrase simply describes the yearly variation in an investment portfolio’s rate of return. Across 20 or 30 years of saving and investing for the future, what kind of impact do these deviations from the average return have on a portfolio’s final value?