An important concept for retirees is sequence-of-return risk.

If you start your retirement investing at the peak of a bull market, that will limit your returns.

And if you start withdrawing from your retirement kitty at the bottom of a bear market, that will limit your wealth too.

So what are we to make of this? Eric Nelson, CEO of Servo Wealth Management, offers a few thoughts, based on the bear markets of 2000-2002 and 2008.

• "First, your portfolio’s sequence of returns is not necessarily a risk to your long-term spending ability," he writes in a commentary. "Instead, the return pattern seems to impact more the amount of wealth you’re able to leave behind."
• In addition, conventional wisdom about the advantages of bonds may be inaccurate, Nelson says. "Portfolios that place an extreme emphasis on low-risk asset classes [such as bonds] expose retirees to significant long-term, purchasing power risk. They have low volatility, but even lower-relative returns compared to stocks."

The S&P 500 index has tripled from its March 2009 low, while the 10-year Treasury yield fell just 15 basis points during that period to 2.09 percent.

Elsewhere on the investment front, it's been a highly profitable 6 ½ years for investors in U.S. stocks and some fixed-income assets too. That gives rise to the question: what could upset the apple cart?

Gregory Zuckerman of The Wall Street Journal cites four possibilities. Two of them include:

• "Central Bankers Bungle It." The Federal Reserve may raise interest rates as soon as next month, after keeping its federal funds rate target at a record low since December 2008. "Markets have faith in central bankers fighting to generate global growth," Zuckerman says. "But corporate bonds could be hurt if . . . the Fed raises rates at a faster pace than economists expect."
• "China Goes Downhill and the Greek Bailout Fails." The Shanghai Stock Exchange Composite Index has dropped 25 percent since June 12. "If troubles persist, questions could grow about the Chinese government’s ability to steer the debt-laden economy," Zuckerman notes. And the latest bailout of Greece — it reached a tentative deal with its creditors Tuesday — might not succeed.

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