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  5. MISC: Hi there, I have an interesting question regarding sell equities from a global etf to live on in retirement. [Miscellaneous]
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Q: Hi there, I have an interesting question regarding sell equities from a global etf to live on in retirement. I would sell once a year to set aside money for yearly living expenses. I suppose indiscriminately a person could do this on Jan 1 every year but presumably the ideal time to sell equity to live off would be at their yearly highs. Based on this presumption, technically and seasonality wise historically when would be a good time in the year to pull expenses to fund a years worth of living expenses?
Asked by Michael on July 19, 2024
5i Research Answer:

It is really not possible to know this on a repeatable basis. Every year is different. The only real concrete, academically proven calendar themes are maybe to 'not' sell in November as this tends to be peak tax-loss selling season, and if one owns small caps perhaps sell them in January, as there is often a small cap bounce that month. Other than that, it is largely a guess. Historically, July is one of the best-performing months of the year for the stock market. According to Dow Jones Market Data, since 1928, the S&P 500 has posted an average gain of 1.7% in July, finishing in positive territory 60% of the time. With low or zero commissions these days, we think it would still be much safer to spread out selling over the year. In addition to not having to 'time' the market, this will allow more capital to earn more dividends and provide a little bit of extra compounding for an investor.