Ingvar Rueckemann @ingruc: "👉 As promised, my take..."

Sweden

👉 As promised, my take on RISK MANAGEMENT, which is also timely given current events: ❗First of all, risk management starts long before volatility strikes. It needs to be built into stock selection, portfolio exposure, and your general psychology about how you approach your investments. ❗Second, risk management for me does NOT mean to avoid drawdowns. The portfolio is allowed to go down in the short term. This does not bother me very much, since I select stocks which I believe will outperform the market over the long-term. (And long-term is years, not months). ❗Third: Focus on the things you can control. I cannot control what the market does tomorrow or in a year from now. But I can control how I build the portfolio, so here are a couple of basic principles I always try to follow: ▶ 1) Margin of Safety Usually my price targets are at least 50-100% above my entry price. Also, those price targets are usually built on conservative assumptions about the future, i.e. reasonable growth assumptions (if any at all), and reasonable multiples for the future. ▶ 2) Diversify Apparently the only free lunch in investing. And indeed, the idea is intuitive. Instead of investing in one industry or region, one should combine several, so they can balance each other out. While I do build larger positions in high-conviction stocks, and tend to overweight some sectors or regions, I nonetheless always make sure that there is a good blend of industries and geographies in the portfolio. ▶ 3) Avoid things you don't understand Following this age-old wisdom from Warren Buffett, I pass on opportunities regularly because I don't fully grasp how the company makes money, how attractive their target market really is, or how management wants to achieve their own lofty goals. I think this is essential. When things get too complex, there is usually reason for concern. I leave those for others to figure out, and focus what I feel I understand. 💁‍♂️These points capture the main principles I follow in the management of my portfolio; I hope they give you good insight into my thinking. 📜 Do feel free to screenshot and save for reference! Other than that, a lot going on these days. Take it with a pinch of salt; we will get through it! 🙂 All the best, Ingvar $SPX500 $EUSTX50

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