We believe the same portfolio with market timing will be subject to a 12-month loss of 5 to 6 percent every 25 years. But its performance was still very good, and we believe it will meet the needs of most retirees who can tolerate fluctuations in the size of their periodic withdrawals. For many people, that will be well worth the underperformance. But it has two drawbacks that will be significant to many people. First, timing is more complex and harder to understand.
Many investors find it difficult to trust.
If you're going to time a portfolio, that's a crucial question. We believe most retirees who want to use timing will hire somebody to do it for them. Therefore, the timing results reported here include the effect of management fees that are in the ballpark of what many money managers charge. Obviously, the more you pay for this service, the lower will be your returns. If you want to save those fees, you can do your own timing.