"Neither a man nor a crowd nor a nation can be trusted to act humanely or think sanely under the influence of a great fear...to conquer fear is the beginning of wisdom."
Bertrand Russell
Risk can be managed, but not eliminated. What we can do is recognize that landmines exist, and structure our portfolios in such a way that our holdings carry different risks that trigger at different times. This way, investors don’t face a perfect storm like 2008 where every risk attacks at the same time.
Recovering a Loss
Two steps forward, one step back is acceptable. The reverse is not....look how hard it is to recover. We think the best approach is to try and avoid going beyond the 10% loss threshold, thus a "belt and suspenders" approach to structuring your portfolio.
