Ramin Nakisa

I could see the grey hair, mate.

But I think, yeah, the rules that people come up with, yeah, OK, you want to take less risk just before you retire.

I think that's a given.

There's something called sequencing risk, where if you're just about to start drawing on the money, so you have to sell stuff in order to eat, well, you don't want to have to sell things after they've crashed.

So at that point, you want things which don't crash, which would be things like cash, money market funds, shorter duration gilts,

maybe even global bond funds, you know, non-crashy things.

Because then if equity markets fall 40%, well, you can eat the safe stuff until equity markets recover.

So you can avoid the sequencing risk.

The way to think of it is you're kind of scooping off a fixed amount of stuff, right?

So if you're taking...

say, £40,000 every year is what you're selling from your portfolio.

If the size of your portfolio is halved, then the percentage you're withdrawing that year is going to be higher than it was before it shrank.

So that means you're depleting the portfolio much more quickly.

So that's why you want stuff where it doesn't shrink, so you can allow equity to snap back up.

I mean, some people I speak to, they're very nervous.

So for them, they probably wouldn't want to be 100% equity because they will see a 40% peak to trough fall at some point.

And they could be a nervous wreck if that happens.

Or they may even sell, you know, the worst possible thing you can do.

So I think that's really important.

It's about risk appetite as well as risk capacity.