Withdrawal strategy
The rule by which money is regularly taken out of a portfolio to live on: a fixed sum adjusted for inflation, a fixed share of assets, or a combination with a floor.
How to read the number
The decisive quantity is not the average return but the order in which it arrives: withdrawals during a decline sell more securities for the same sum and shrink the base the recovery works on.
When the metric lies
Also known as: decumulation rule