Why sequence risk is real (and can play havoc with portfolios)

Industry commentators wailing about the horrors of sequence risk recently got a soft slap from FinaMetrica's Paul Resnik, when he opined their "reasoning was not supported by the evidence", based on his research. Given advisers are beginning to design shiny new ‘Centralised Retirement Propositions', what should we make of this spat? As I'm sure you're aware, sequence risk is the chance that a withdrawal and capital preservation strategy in retirement could be ruined by a series of negative returns. Put starkly, during a valuation fall of 40%, a 5% withdrawal taken monthly rises to over 8...