AE Investment Research ApS @AndersEgsvang: "Uncertainty is a constant companion..."

Denmark

Uncertainty is a constant companion when we invest. It is not only market fluctuations that create it often it arises because we don’t feel fully confident about what drives our results. When the market rises, many investors experience a form of overconfidence bias: we believe that it is our own skill driving returns, when in reality it may not be your skills that actually drives the return but just the market upswing. This can lead us to take more risk than we are truly comfortable with. When the market falls, doubt sets in: Did I choose the right stocks? What if prices fall even further? Have I overlooked a risk? The fear of loss can easily lead us to act often at the worst possible moments. This also the case when you copy other investors or trade funds. If you do not trust the manager or the strategy uncertainty and fear may set in during uncertain times. 📊 An example: Over the past 5 years, for example $NVDA (NVIDIA Corporation) have contributed a significant portion of the returns in both the $SPX500 $SPY (SPDR S&P 500 ETF) and $NSDQ100 . If you held that stock, it has likely covered for several less successful decisions. That is something to pat yourself on the back for. But keep in mind: 👉 1) It is dangerous to assume that this performance will continue indefinitely. No company can outperform all others forever. 👉 2) The method you used to pick these stocks may be difficult to replicate. Was it a well-thought-out strategy – or was there also an element of luck? This is where having a clear, consistent strategy becomes crucial. Not to eliminate risk, without risk, we cannot achieve returns, but to ensure that risk is consciously managed rather than random. A solid strategy helps you: Reduce uncertainty, because you know why a stock is in your portfolio. Avoid being blinded by a few successful picks. Navigate calmly, even when the market moves against you. Behavioral finance shows us that humans often fool themselves when emotions take over. We overestimate our abilities in upswings and are paralyzed by fear in downswings. A well-structured strategy is your best insurance against this – because it creates structure and discipline when emotions would otherwise dominate. Ask yourself whether you are comfortable with the risk you are taking – and whether you could repeat your successful decisions if the market changed significantly. If not, it may be time to consider how a more structured strategy can give you both better peace of mind and more robust results. A brief overview of my strategy and risk approach: I select stocks which combines growth and profitability, and have backtested the strategy for over 20 years – through the dotcom bubble, the financial crisis, and several major market swings. Every decision is based on clear, objective rules, keeping emotions out, and no single stock dominates the portfolio (equal weight). The strategy ensures that returns do not rely on individual companies, but on the portfolio as a whole, giving peace of mind – whether the market rises or falls. Happy investing! Disclaimer: This is in no way investment advice to buy, sell or hold any specific positions. You should always make your own investment decisions. Investing bears certain risks and puts your capital at risk. Historical and backtested results are in no way equal to future returns. Future returns can vary significantly from historical and backtested results. Backtested results are not an indication for potential future returns.

4 Mentioned

NVDA

NVIDIA Corporation

SPX500

SPY

SPDR S&P 500 ETF

NSDQ100

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