November 12, 2025 – Hello, readers! Welcome to another installment of the Safe Withdrawal Rate Series. Please see this landing page for an introduction to the Series and a summary of all the other parts so far. After a long hiatus from writing due to my busy travel schedule during the summer and lots of other commitments, I’ve found my groove again and put together something that has been on my mind for many years: Is there an asset allocation strategy that could have improved historical safe withdrawal rates? Specifically, could we devise an asset allocation strategy that shifts weights between different asset classes in a way to improve investment results? Of course, that’s easier said than done, but there are some interesting ideas out there. One such approach is to tactically shift asset class weights based on asset return momentum. Some people also refer to this flavor as “Trend-Following.” If you want to sound really techy and fancy, you’d also call this “Tactical Asset Allocation” (TAA), “Managed Futures,” or “Commodity Trading Advisers” (CTA) strategies; however, these three terms often encompass many other dynamic asset allocation strategies, not just momentum.

In any case, maybe a momentum strategy can help us avoid some of the worst historical asset market disasters if we could sell equities early enough during a bear market. How much Sequence Risk could we eliminate? By how much can we raise our safe withdrawal rate if we could have reliably avoided some of the worst historical asset market disasters? Let’s take a look..