Search “What is the UK safe withdrawal rate?” and the results are disappointing. Google’s AI response offers 4%, which as we’ll see is just plain wrong. Meanwhile it’s hard to get a straight answer from the humans amid all the financial content marketing.

Indeed there’s plenty of sketchy chat about the 4% rule. It’s a much-misunderstood figure – predicated on US numbers that aren’t reflective of the data from most other developed world countries, including the UK.

This matters, especially considering that some US financial experts believe the 4% rule may be too high even for Americans.

Investigating the UK safe withdrawal rate (SWR) provides useful counter-evidence, a sober corrective, and a uniquely British perspective on not running out of money in retirement.

Not safe! I need to mention that the so-called ‘safe withdrawal rate’ is a complete misnomer. Applying the SWR rules naively does not guarantee safely completing your retirement with money still in the bank. A SWR number is just a rule-of-thumb. It may not be enough to keep your portfolio off the retirement rocks. For that reason, some prefer the term ‘sustainable withdrawal rate’. It’s the same metric, minus the misleading advertising.

Okay, before we get to the UK’s SWR number, let’s recap what the safe withdrawal rate actually is and does.

What is the safe withdrawal rate?

Figuring out a safe withdrawal rate is useful for:

• Retirees who want to know how much they can withdraw from their pension pot each year, while minimising the chances of exhausting it over some given timeframe. (Say 30 years).

• Anyone wondering: “How much should I put in my pension?” A realistic SWR helps you calculate how big your retirement savings should be before you tell The Man where to stick it.

The SWR itself represents the maximum percentage of your portfolio you can withdraw as income in the first year of retirement.

For example, a 4% SWR suggests a £500,000 portfolio can sustainably support a £20,000 annual income.

After year one, you discard the SWR and simply multiply your established income by annual inflation to calculate the next year’s income. Hence you effectively live off the same real-terms income every year. So £20,000 in this example. 

The crucial thing is your initial withdrawal rate should be set low enough (based on historical precedent) that you can draw a stable real-terms income for the rest of your life, barring catastrophe. 

How is the safe withdrawal rate calculated?

The devil is in this detail! The safe withdrawal rate for the UK or any other country is derived from backtests of asset class real returns.

Torturing the data reveals:

• The highest withdrawal rate that could have been sustained…
• …for a particular retirement length, by a particular portfolio…
• …during the worst sequence of returns faced by retirees…
• …that’s captured by your chosen historical record

Got that?

For example, the famous 4% rule was originally formulated by financial planner William Bengen.

Bengen discovered a US retiree should choose 4% as the maximum safe withdrawal rate (known as MSWR or SAFEMAX).

The small print 

Bengen’s 4% number was – and is – conditioned on:

• A 30-year retirement. Longer retirements equal lower SWRs.
• A 50/50 US equity/bond portfolio. Different asset allocations and assets produce different results. As do different datasets. 
• US inflation. It’s been fairly benign in comparison to the UK experience.
• Not incorporating costs and taxes. We pay those in the real world.
• The portfolio surviving the worst-case returns in recorded financial history. Clairvoyants can withdraw more if they know they’re living through better times. They should withdraw less if they predict fortune will deal their plans an unprecedented blow
• Annual rebalancing. Change the rebalancing rules and you change the number.
• Withdrawing the same inflation-adjusted income every year for the length of the retirement. No more, no less.

From that cluster bomb of caveats we can deduce that:

• Change any of the conditions and you change the SWR.
• The SWR doesn’t account for unparalleled future scenarios. (Especially if your only sample is from the most successful stock market on Earth.)
• SWRs are just heuristics. They need to be modified to suit real-world circumstances.
• Costs and taxes reduce your SWR.
• You may be able to improve your SWR number by using different asset allocations from those usually incorporated into standard SWR tests.
• US historical returns are exceptionally good. They fail to capture the worst-case scenarios embedded in other country’s datasets.
• There’s no reason to suppose that the US will continue to enjoy such favourable conditions.
• Retirees in other countries are ill-advised in adopting the US SWR simply because they can invest in US assets.

I’m not trying to put you off using an SWR here. Far from it.

The safe withdrawal rate lies at the heart of my own retirement planning.

But the 4% rule dominates this conversation like a big orange cheeto, so I want to lay out why that number can’t be taken at face value. 

As far as I’m concerned, the starting point for British residents should be the UK’s safe withdrawal rate, not America’s.

The rest of this article will hopefully show you why. 

Safe withdrawal rate UK

Traditionally, SWR studies calibrate on 30-year retirements, sustained by annually rebalanced equity/bond portfolios.

So we’ll start there and aim to improve our withdrawal rate, by applying some reasonable tweaks, later in this series. 

Here’s the chart of UK SWRs from 1870 up to the last 30-year retirement cohort, the class of 1995:

Data from JST Macrohistory1, FTSE Russell, A Millennium of Macroeconomic Data for the UK and ONS. March 2025.

Each datapoint shows the maximum SWR that a retiree could employ to enjoy 30-years of inflation-adjusted fixed income withdrawals, for a retirement that began in any year from 1870.2

For example, the graph shows us that someone retiring in 1870 could initially withdraw 7.5% from their 60/40 portfolio without emptying it before the 30-year retirement’s end on New Year’s Eve 1899.

The best year was 1975 for most portfolios.3 The class of ’75 could have larged it up with a 15.9% SWR on a 100% stock portfolio. (But note: that’s not as amazing as it sounds because UK equities crashed 73% between 1972-74. So by 1975 the retirees had 100% of a lot less portfolio than they had in 1972.)

The worst times for Brits to begin their golden years were 1910 and 1937 (depending on your asset allocation). 

Safety first

1910 and 1937 are the SAFEMAX years. Their numbers give us the highest SWR that would have sustained the portfolio for the given length of retirement, across all historical scenarios.

The best SAFEMAX UK safe withdrawal rate is 3.1% for 30-year retirements. 

In other words, our version of the 4% rule in the UK is the 3.1% rule.

Everything’s bigger in America!

And you only drum up the 3.1% SWR using a 100% equities portfolio, too.4 The more bonds you add, the worse things get.

The 3.1% rule

I really think the 3.1% rule could catch on, you know. But before I get carried away with the trademarking, let’s find out how much it squeezes your income relative to the 4% rule.

• £500,000 x 3.1% = £15,500 sustainable real income.
• A 4% SWR provides £20,000.

What size portfolio do you need to support £20,000 with a 3.1% SWR?

• £20,000 / 3.1% = £645,161

That’s a sickener. Your starting portfolio needs to be 29% larger with the 3.1% rule versus a 4% SWR.

But hang in there! It will get better, but first, it’s gotta get worse.

Here’s the full safe withdrawal rate UK table including longer retirement periods:

Safe withdrawal rate (%) UK equity/bond portfolios by retirement length 

These SWRs delivered a 100% success rate. SWR research typically includes 0% to 20% equity portfolios. But I haven’t because I suspect they matter to few Monevator readers. For similar reasons I’ve excluded shorter retirements. It won’t be hard for me to dial ’em up if anyone wants the info.

Doubtless many Monevator readers will be hoping to stretch out their mortal coil a little longer than 30 years. And the trade-off is clear: Mo years mo money.

Sorry my Gen Z friends.

You’ll also notice the SWR uptick gained from reducing bond exposure (i.e. holding more equities) is quite large.

The 100% equities SWR is fully 35% larger than the 40% equities number for a 40-year retirement.

That’s very different from the optimal US withdrawal rate, which includes a substantial bond allocation.

Wade Pfau calculated that any US equity allocation between 20% and 44% lies within 0.1% of the best SWR for a 40-year period – while I previously found that an 80% global equities allocation was best for 30-year or longer retirements with the Timeline dataset, with 70% being a hair’s breadth behind. 

We’ll look at a broader range of asset allocations in more depth later in the series.

Charging ahead

Finally, we best not forget portfolio charges. The rule of thumb is:

• Calculate your costs as a percentage of your portfolio’s value
• Reduce your SWR by half that percentage

For example, the running costs of our No Cat Food retirement portfolio are around 0.3%. That includes ETF OCFs, platform charges, and dealing fees.

So using that as a guide, we’d have to knock 0.15% from our chosen SWR.

Why Brits shouldn’t use the US 4% safe withdrawal rate

You can buy an S&P 500 ETF and US Treasury bonds. So why can’t we Brits just declare for Team America and supersize our SWR?

Because it doesn’t work. Here’s the SAFEMAX table for portfolios formed on US equities (unhedged, GBP returns) and US Treasuries (GBP hedged).

Safe withdrawal rate (%) UK: US equity/US Treasury portfolios

SAFEMAX year is 1969 except for 40/60 portfolios – 35-50yr retirements, SAFEMAX 1965. Additional US data from Aswath Damodaran. March 2025.

Well, these are better withdrawal rates. Sometimes impressively so for longer retirements.

But the thing that’s jumping out at me is the distinct lack of 4 per cents. Or anything like them.

In fact, for the baseline 30-year retirement portfolio, buying American only upgrades us from the 3.1% rule to 3.2%. Disappointing.

The problem is that the UK’s inflation record is considerably worse than the US’s.5 And a safe withdrawal rate is founded on real returns. So while it’s true the S&P 500 has left our equities trailing, British price pressures still knocked the shine off American exceptionalism.

This means you can bedeck your portfolio in the Stars and Stripes, but there’s a risk it’ll be hampered like a Dodge Viper stuck in single-lane traffic on a Devonshire country road.

The bond-gnawing brutality of UK inflation also explains why the best US-orientated GBP portfolio is still 100% equities in contrast to more balanced Stateside recommendations.

Counterintuitively, Blighty’s SWR actually goes up if you bench US Treasuries and bring UK gilts back on.

Yes, there are differences in the maturities counted in the datasets. But a significant factor is also likely to be that British bond investors demand a fatter yield to compensate for bigger UK price shocks. Whereas US bondholders can happily settle for a skinnier inflation premium less suited to British conditions.

Ultimately though, a US equity/bond portfolio suffers from the same fundamental problem that a Union-Jacked one does: inadequate inflation protection.

Albion’s way

This isn’t a problem that’s likely to go away. US CPI increased 13.3% during the recent bout of high inflation from 2021-24. Ours rose by a chunkier 20%.

We have a more open economy than the US. One that’s more vulnerable to importing inflation from abroad.

As we’ll see later in the series, the appropriate response to this is to hold a better mix of assets. 

Portfolio ruin: the danger of overcooking your SWR

Am I being nerdy and pernickity?

Well it wouldn’t be the first time – but just so you know this next chart shows what happens if you apply the 4% rule to a 30-year retirement starting in 1910:

These retirees went broke inside 17 years. The portfolio loses money in real terms for ten of the first 11 years.

Meanwhile inflation goes through the roof: up 158% from 1915 to 1920.

Every year our retirees scale up their withdrawal to cover inflation, swigging ever larger rations from their dwindling reserves.

Healthy returns arrive during the remaining five years of the portfolio’s shortened life but by then it’s too late. The portfolio has already entered a death spiral as the retirees withdraw 180% more in 1921 than they did in 1910.

There are simply too few assets left for growth to cover outgoings. The money’s gone before Christmas 1926.

Granted, in reality very few people would watch their resources evaporate like this without taking action. Budget cuts would ensue or you’d go back to work, or both.

But the point is that taking too much income from the start risks living later years in bleak austerity. 

How often does the 4% rule fail in the UK?

This next table shows you the percentage of retirement periods (%) that could not sustain a 4% SWR for different UK equity/bond portfolio allocations:

Those are unacceptable failure rates in my view. And the sheer size of the numbers indicates that the UK’s problem isn’t limited to a few benighted retirements that were ravaged by two World Wars. 

Superficially, the UK’s SAFEMAX years of 1910 and 1937 seem easy to dismiss. I can almost hear the devil on my shoulder saying: “Don’t worry about it. That’s ancient history. Nobody would be stupid enough to start a world war today.”

But I’m much less confident about that than I was. 

I don’t know about you, but I’m feeling pretty twitchy about the prospect of British peacekeepers in Ukraine – operating without adequate American support. Not to mention the prospect of a rising China and the closing of Thucydides Trap. 

But we don’t need to debate the probability of a war between World Powers. Just cast your mind back to the US asset-based portfolios we looked at earlier. There the SAFEMAX years were 1969 and 1965. 

These pasty SWRs were induced by 1970s economic malaise, not by existential conflict. 

UK OK

Alright, that’s enough doom and gloom.

This post has been about making public the kind of data that Americans take for granted.

And because we’re starved of information on the UK safe withdrawal rate, many Brits are told it’s fine to borrow the US one.

In truth though, the 4% rule does not travel well.

But while ours may not be as good as theirs, there’s plenty we can do to beef up a realistic, UK-centric SWR. We’ll explore how to do that later in this series. In the next episode we’ll investigate how you can tell if you’re slipping into the SWR danger zone. 

Take it steady,

The Accumulator

1. Òscar Jordà, Katharina Knoll, Dmitry Kuvshinov, Moritz Schularick, and Alan M. Taylor. 2019. The Rate of Return on Everything, 1870–2015. Quarterly Journal of Economics, 134(3), 1225-1298. [↩]
2. We need a full 30 years of data to calculate the maximum safe withdrawal rate, hence no numbers yet for post-1995 retirements. The SWR number for each retirement cohort can only be known in retrospect. [↩]
3. The 40/60 portfolio could only muster a relatively measly 10.9% SWR in 1982. [↩]
4. For some reason, you’re allowed to assume you could have known the ideal retirement asset allocation in advance, which you couldn’t. This condition is called ‘Perfect foresight’. Not a gift of mine unfortunately. [↩]
5. It’s debatable as to how much of the gap is an artefact of different headline inflation methodologies. For instance RPI vs CPI. [↩]

What caught my eye this week.

Donald Trump’s antics finally tipped the US stock market into a correction this week, defined here as a 10% fall from the highs in the S&P 500.

The median US stock did even worse, posting a 20% decline.

According to Bloomberg, this 16-session losing streak was the seventh-fastest such plunge since 1929.

However the US market bounced on Friday. And personally, I’m seeing few signs of real panic.

Indeed why should there be? Investors de-rating US shares by a modest 10% to reflect the wildly unpredictable Washington mob ripping up the rulebook seems reasonable to me.

Besides, anyone who’s been invested in US equities for a while should still have some very fat gains to bolster their nerves.

Bear necessities

On that note: have we forgotten what a proper bear market feels like?

The Covid crash was a shock but short-lived – and there was lots else going on to distract us.

The 2022 growth stock rout largely passed UK investors by. The weaker pound that year boosted global portfolios in Sterling terms and the biggest shares soon recovered.

Most of you probably don’t even remember 2018’s ‘taper tantrum’.

It’s been a while since investors really got the willies.

You’ll be fearful when others are fearful

I even read in the Monevator comments this week a suggestion from a smart and well-regarded reader that one could avoid volatile and arguably expensive markets now, and then after a crash buy leveraged ETFs to doubly profit on the bounce.

Now each to their own and I’m all for creative thinking, but this sounds to me like bull market fatigue speaking.

We’ve had it too good for too long, maybe? Bridgewater says the most recent 15-year stretch for US stocks was the best since 1970…

…so I’m here to remind you that in a proper bear market, people aren’t thinking about piling into two- or three-times levered ETFs to earn outsized returns in some undated recovery.

They’re wondering if they’ll ever get their money back at all.

Or they’re feeling guilty about their gran who gave them £1,000 when they went to university which she saved by going without for years, and which they just vapourised in five minutes playing Gordon Gecko in the midst of a global meltdown. (Been there, got that T-shirt.)

They’re saying never again.

In a proper bear market it’s hard enough just to not sell and to get through the terrible daily news.

And when the bottom does come, few people will be listening, believe it, or even care.

Survival is the name of the game in bear markets. If you must try to market time your way through one, I’d say keep it as simple as possible and keep gearing at bay with a barge pole.

Leveraged ETFs are for bull runs and for risk-takers who really know what they’re doing. Most of us should just keep on keeping on.

Have a great weekend!

[continue reading…]

I have long had a crush on Hetty Green. Not a romantic one: Green lived a century ago, and not even my imagination is that deluded.

Rather the type of infatuation that kids have for their favourite Harry Potter character or that billionaire tech bros have for Ayn Rand.

Kind of fun to think about, but a fantasy. Like a Patronus charm, or a government that moves fast and breaks things – regulations, democracies, good taste – without causing lots of collateral damage.

Hetty Green: Proto degenerate trader (Image: Wikipedia)

With Hetty Green the impossible dream on offer is the mastery of market timing. Of selling your assets when euphoria is at a peak, and then buying back cheap when others are in despair.

It sounds so easy on paper.

Buy low sell high!

And two-way market timing is steroids to your hypothetical returns on a spreadsheet too.

But in practice most people who try market timing might as well be waving a wand over a toad.

The gilded age of market timing

Hetty Green though was the first lady of market timing.

Quite literally.

Because if you’ve heard of Hetty Green (1834-1916) then you’ll also know what the papers called her:

The Witch of Wall Street.

Which honestly isn’t doing my crush any harm.

I mean, while it’s certainly sexist – hailing from a time when any woman making decisions on Wall Street seemed a phantasm – the Witch of Wall Street epithet is also kind of, well, wicked.

But the bigger point is that any female investors were rare back then. So one looming so large in the public’s imagination in the age of Robber Barons was unprecedented.

Be still my beating heart!

Fortunately my goth (/emo) phase pre-dated my investing, so I didn’t know as I mainlined The Cure anything about widow Henrietta’s all-black garb and her sombre hats festooned in black ostrich feathers.

And I certainly wouldn’t have understood how original her contrarian thinking was.

I’ll have what he’s not having

You see Green’s mystique wasn’t simply down to a wardrobe Robert Smith or Billie Eilish would die for.

It was also thanks to how ‘the richest woman in America’ got that way.

Which – supposedly – was by appearing in Wall Street in the midst of market crashes like some gusseted Grim Reaper, hoovering up stock certificates from desperate and over-extended speculators, and then floating back out of town to return to her lair to wait for the next bear market.

A deeper reading of her life shows this to be nonsense – Green kept a permanent desk at a New York bank from where she conducted her extended financial affairs –  but the image still packs a punch.

And the gist of it is true.

Many decades before Warren Buffett was being greedy when others were fearful, Green reportedly said:

“There is no great secret in fortune making. All you do is buy cheap and sell dear, act with thrift and shrewdness, and be persistent”.

And the historical records agree that Green did regularly buy when there was blood on the streets, to quote Nathan Rothschild, another battlefield-raven of an investor.

Magical thinking and market timing

For example Hetty scored a big early win by loading up on ‘greenbacks’ – a novel form of US government debt created by Abraham Lincoln to fund the Civil War effort.

When other investors dumped the paper for gold, Green was a buyer at 40-50 cents on the dollar. She profited mightily when it became clear that the US government would stand behind its obligations.

Her life story is full of such counter-cyclical trading.

But what is less understood about Green – and which I’ll touch on below – is that this legendary market timer actually rarely sold.

Green certainly bought when other investors were on their uppers. But she bought-to-hold.

And here we have a key insight into market timing, and how not to do it.

In, out, shaken all about

Because one of the massive problems with market timing, at least if understood as trying to get out at a top – or even when you fear you’re only halfway to the bottom – is someday you must get back in again.

And evidence and common sense suggests that while you might be skilled or lucky once, to expect to beat the market twice in a row with great timing smacks of hubris.

But buying cheap in a crash and then tucking it away?

While not short of its own problems – such as lousy returns on the cash set aside while you wait for a crash, perhaps for years – such a strategy is at least closer to investing than trading.

Which, again, is not to say you’ll do better than a passive investor who just pound-cost averages in more money regardless.

Indeed in a superb post for the ages, blogger Nick Maggiulli once showed how even God – presumed here to be a perfect market-timer – would usually fail to beat an investor who simply socks away more money on a schedule.

How come?

Well, waiting for a buyable dip as the market races upwards has an opportunity cost. Your cash usually isn’t compounding at anything like the same rate of return as shares.

Worse, any crash that eventually does come often won’t make up the difference – assuming you even have perfect knowledge of the best moment to buy such a dip.

Which – spoiler alert – you don’t.

Against that, the Dow Jones Industrial Average was in the low 100s in 1916, the year Hetty Green died.

It touched 45,000 in December 2024.

Which is to say the US stock market at least has always eventually recovered – and thus has always eventually bailed out a buy-and-hold investor.

Avoiding crashes with your market timing efforts might feel good in the moment. But missing out on big long-term gains will kill you.

Mistiming en masse

I won’t say there’s nobody taking their whole portfolios in and out of equities on a rinse-and-repeat path to riches.

But if there is then they are hiding their talents – and the resultant fortunes – under many bushels.

Certainly there’s not many. I can’t recall ever reading research suggesting market timing delivered any excess returns for so-called retail investors write large. (That’s commoners like you and me).

On the contrary, Googling reveals plenty of research suggesting bad timing costs us dearly.

Investing even has special phrases like the ‘behaviour gap’ to flag how private investors make return-sapping decisions by trying to time when they invest their money where.

You can’t even pay a professional to do it

But yes, some small number of individuals may have the gift of market timing.

As I said above, you’ll soon find out if that’s you if you try.

Enjoy your imminent riches!

Indeed you might think anyone so blessed would quickly become a professional investor in order to truly profit from their rare skill.

Alas – evidence of wonderful market timing by professional investors is notably absent, too.

As a group, most go-anywhere hedge funds have chalked up mediocre returns for years. Their managers blamed everything from irrational markets to low rates to index fund distortions for their woes. But if they really could market time then they’d have stayed 100% in US large cap stocks, feasting on the gains.

More likely they long ago judged such companies had become too popular and paid the price.

Another case in point are tactical-allocation funds. Their whole raison d’être is to judiciously get in and out of different asset classes at the right time.

But Morningstar recently reported that:

When compared against the average fund in the moderate-allocation category, tactical asset-allocation funds have lagged by more than 2 percentage points per year, on average, over the past five years.

They’ve trailed by roughly twice that amount when compared against a simple portfolio composed of 60% stocks and 40% bonds and rebalanced annually.

These funds are very well-resourced outfits where pay and bonuses depend on getting such calls right. Yet they can’t do it well enough to beat a 60/40 portfolio.

So do you feel lucky, punter?

I read this week the chairman of Ruffer – a multi-asset allocation fund – trying to spin poor performance of late as some sort of rallying cry.

To paraphrase: equity markets are too high, and we know because we got out two years ago and since then we’ve lagged badly and this always happens to us.

Um guys… that’s not a feature, it’s a bug.

Tips for would-be market timers

I like Ruffer by the way, and I read their reports because I like to hear what they have to say.

But the point is market timing is much, much harder than it looks.

My best market timing advice to readers would be don’t do it. Our house guidance is to invest passively into index funds and ignore the noise for good reason.

Both evidence and observation suggests to me most people will do worse in trying to strategically juggle their asset allocations around, whether they’re doing it by maths, intuition, or chicken entrails.

Market timing can also be a gateway to other bad behaviours. Stuff like over-trading, or focusing on short-term wins versus the long-term gains that really drive returns.

All that said, Monevator is a broad church and I’m a naughty active investor myself who absolutely does shift my allocation around depending on my mood swings reading of the economy and the markets.

And while I have many faults, I’m not too much of a hypocrite.

What’s more there are clearly some successful funds – and a few legendary investors – who do employ timing to some degree.

Famed US fund manager Stanley Druckenmiller hasn’t had a single down year in decades. He obviously didn’t achieve that by sitting on his hands and reading Jack Bogle.

So if someone wants to try market timing, why not?

Again, a hugely attractive trait of investing is that it is scored.

Provided you’re keeping meticulous records, the markets will soon let you know if your timing experiments are costing you (very likely) or adding value (at least until they don’t…).

Ideally run the experiment when you’re young and any painful lessons won’t do much damage – and while there’s still time for a lucrative career switch to The City should you discover you do have edge.

I did it my way

Here’s a few personal hints about market timing from my decades as a wannabe Hetty Green:

Have a plan in advance. Suddenly shifting from passive investing to becoming a market timer in the midst of a crash isn’t being strategic. It’s panicking.

Don’t go all-in or all-out of equities. Some market strategies advocate for it. I say be humble. Warren Buffett is a legend for letting his cash pile-up when markets are richly-valued. But Buffett doesn’t sell all his shares. And neither you or I are Warren Buffett.

Focus on the egregious anomalies. The CAPE ratio is 20% above its long-run average? Who cares. It could stay that way for a decade – or forever. But Japan in the 1980s, Dotcom stocks in 1999, or – whisper it – inflation-linked bonds in the near-zero interest rate era? Crazy. You could have at least halved your stake and been soberly prudent in doing so.

Always remember you have to get back in. Don’t wait for a perfect checklist of signals that the bear market has bottomed. You should be buying long before that. I’m always legging in and out of positions when I’m (for my sins) trying to curb the worst damage of a falling market. It’s almost a strategy of rearranging deckchairs on the Titanic – saving a percentage point here and there. Sounds crap, until you recall that on the Titanic there weren’t enough lifeboats, and the markets are hardly any kinder.

Watch momentum. I’m not a trend follower, but there is evidence that big breaks in momentum can signal turning points in market direction. Obviously it’s not easy or everyone would be doing it, but you should at least read up on the basics about 200-day moving averages and the like if you’re dabbling.

Clinging to quality versus the dash for trash. I did a bit of useful reshuffling during the Global Financial Crisis. I sold my bank holdings early, and kept buying other equities as the market fell and bottomed out. But when the rally came, my portfolio was initially left behind. Why? Because I’d loaded up on safer higher-quality stocks. Yet what recovers first in a new bull market is often whatever junky stocks didn’t go bust in the downturn but were priced like they would. Once more with feeling: this game is not easy!

I could continue but my co-blogger The Accumulator will put out a contract out on me. So that’s enough off-messaging for one day.

Market timing: unnecessary and insufficient

Of course in a long career every professional will get market timing calls right now and then.

If they’re able to then get lots of publicity for it, doing so might make their name as a market sage for life. The financial media isn’t known for rigorous accounting or counterfactual thinking.

But we’re about taking charge of our futures here on Monevator, and this is your own money at stake.

Your financial freedom, your early retirement, or your kids’ future.

And guess what? You don’t need to make a name for yourself as the person who called a crash right once and then filled their funds with client money for years on the back of it.

Rather, you need decent returns compounded over multiple decades to reach your financial goals.

Market timing mayhem is more likely to be a pitfall than a boost on such a journey.

To give one example: selling out in a bear market and then failing to buy back in before the market redoubles will permanently impair your portfolio – or even worse your appetite for any investment at all.

The most damaged traders are the once-burned market timers who subsequently sit in cash forever.

It’s not easy being Green

Again: most people will do best with a sensible financial plan that doesn’t rely on luck or genius.

Read our passive investing guide and have at it.

But if you must try market timing, I’d aim to be more like Hetty Green and less like your favourite social media huckster or YouTube trading guru.

Look to be an active buyer of risk assets when markets are down, say, but aim to then hold indefinitely.

Shift towards value or momentum at the margin. But don’t move in and out of markets wholesale.

And get some funereal black for your wardrobe.

Because even with this more modest approach to market timing there’s a strong chance you’re going to need it.