Investing
How to Manage Your Fear of Loss and the Maximum Stock Exposure You can Tolerate to Remain Invested Longer
By Investment Moats  •  December 25, 2021
Three years ago, Financial Samurai wrote a great post to help us make sense of our exposure to risky assets versus how much pain we can endure. I thought it is always good to reshare it here and update my thoughts about it (this post was first published in Jan 2019). Those who have chatted with me would know how I feel about some of his posts, which sometimes border on too dramatic but often he comes from a more conservative angle. This article gives a good way to frame the problem of managing your equity exposure, and how to balance up your risk tolerance. Why We Fear Market Drawdowns A drawdown happens when something that you bought fall in value from a certain point. Usually, suppose a stock reaches an all-time high of $100 and now it is at $70, we say the stock experienced a 30% drawdown. Psychologically, most of us do not take large drawdown of our...
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By Investment Moats
Investment Moats is set up by Kyith Ng and have been around since 2005. He aims to share his experiences making sense of money, how money works and ways to grow his money. It hopes that by sharing his experiences, both good and bad, season investors can advice and critique his decisions and new investors can learn from them and find their own style ...
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