Wednesday, September 30, 2009

7th lessson

7th lesson: Higher gains are needed to compensate losses (see table below). Well, this is a lesson that I have to re-remember. And since I am likely to inject capital into my portfolio during times of distress, I may need smaller percentage gains to recover from my losses (in dollars terms).

Lowering Risk of Bad Outcomes

As one's net worth gets larger, lowering the risk of bad outcomes becomes more relevant and important. For example, if you have retired ...