Taking Stock with Steele
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Taking Stock with Steele is our newsletter where we share our insights and expertise. Our goal is to ensure our clients are well informed. We shift through the noise and only bring important topics of discussion and planning points that are relevant and useful. We believe Knowledge Pays and we want our knowledge to pay for you.
Anyone who spent more than five minutes on Twitter in 2020 and 2021 asked themselves, “What’s up with all the shining Superman / Captain Marvel eyes?” Those laser eyes were donned by modern day cowboys and girls willing to risk it all to invest in a concept that many of them may not have fully understood but one that represented the future nonetheless. These laser eyed folks coalesced around new concepts like crypto assets but also tended to invest in other futuristic concepts like new technology and widespread cannabis legalization. Their enthusiasm was contagious and many of us regulars were encouraged by the technological advances and changes that lie ahead and how it may benefit us financially as well as on a day to day basis.
Sequence of returns (SOR) risk may be one of the least understood concepts in finance. Most investors grasp market risk, inflation risk or longevity risk and how these risks can influence their ability to meet their financial goals but few pay any mind to SOR risk. SOR risk comes from the order in which your investment returns occur, or in other words, the danger that the timing of withdrawals (or contributions) will have a negative impact on your personal rate of return.