Why Buy and Hold Could Destroy Your Retirement: And Why the Math Says Don't

You spent 40 years building the mountain. Nobody taught you how to safely take money off it. Todd Tresidder was one of the early pioneers of quantitative investment management, hand-keying decades of Dow Jones data into an IBM PC to prove that markets could be traded with math. He spent 12 years being paid to test what actually works in the financial markets, ran money in the hedge fund world, and retired financially independent at 35. Today, he does not manage anyone's money. He teaches and hosts the Financial Mentor Podcast and has authored multiple personal-finance books

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You spent 40 years building the mountain. Nobody taught you how to safely take money off it.

Todd Tresidder was one of the early pioneers of quantitative investment management, hand-keying decades of Dow Jones data into an IBM PC to prove that markets could be traded with math. He spent 12 years being paid to test what actually works in the financial markets, ran money in the hedge fund world, and retired financially independent at 35. Today, he does not manage anyone's money. He teaches and hosts the Financial Mentor Podcast and has authored multiple personal-finance books

In this conversation with host Brett Blake on the Safe Money Radio, Todd explains why almost everything retirees are told about volatility gets the math backwards:

Why a 50 percent loss requires a 100 percent gain just to get back to even, and why there is a "death zone" around a 25 to 33 percent draw-down that is very hard to recover from
The 2000 to 2012 problem: the S&P recovered to new highs, but a retiree following the 4% rule was still down more than 50 percent
The volatility tax, the mathematical reason a portfolio earning 8 to 10 percent can only support a 4 percent withdrawal
Why championship teams are never the best offense in the league, and what that says about how you should structure a retirement portfolio
What Todd sees in today's market: 45 years of Fed tailwind, a bond market still 50 percent off its highs, gold running as a fear trade, and the most speculative environment he has seen in 65 years
Why he stopped trading against his own models, even though he beat them 70 to 80 percent of the time

Todd's Expectancy Wealth Planning course is at Financial Mentor.

Run your own numbers with the free WIYN calculator at brettblake.annuity.com, about three minutes. Or book a Retirement Clarity Session with Brett. Not a sales call. Your numbers, not ours.

Full episode on Safe Money Radio.

Worry Less. Live Longer.

About the host

Brett A. Blake hosts Safe Money Radio and is the CEO of Annuity.com. He is 58, a Harvard MBA who will tell you the degree taught him almost nothing about retirement income. Before Annuity.com, he helped scale a business to nearly $1 billion in annual sales. He lives in Gilbert, Arizona with his wife Erin, and asks the questions every retiree would ask if they had access to the right rooms.

About the guest

Todd Tresidder is the founder of Financial Mentor and a former hedge fund manager who retired financially independent at 35. He hosts the Financial Mentor Podcast and has authored multiple personal-finance books, including How Much Money Do I Need to Retire?. His work has appeared in the Wall Street Journal, Investor's Business Daily, and Yahoo Finance. He lives in Reno, Nevada.

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DISCLAIMER

Safe Money Radio is for educational purposes only and does not constitute investment, tax, or legal advice. Products discussed may not be appropriate for everyone. Always consult a licensed professional before making financial decisions. Product availability varies by state. Guest opinions are their own and past performance does not guarantee future results. Our Agents are licensed to sell insurance products, including annuity products that guarantee retirement income based on the financial strength of the insurance company providing the product. Annuities may not be suitable for everyone. Guarantees are not government-backed or provided by Annuity.com, Inc. Annuity.com, Inc. is a licensed insurance agency. National Producer Number (NPN): 21086345. Licensed in all states where required by law. Doing business in Florida and California as "Annuity.com Insurance Marketing," CA License No. 6013124. In New York, licensed as Annuity.com Insurance Solutions, License No. LA-1860109.

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