๐๐ฟ๐ฎ๐๐ฑ๐ผ๐๐ป๐ ๐ฎ๐ฟ๐ฒ๐ปโ๐ ๐ฏ๐๐ด๐. ๐ง๐ต๐ฒ๐โ๐ฟ๐ฒ ๐๐ต๐ฒ ๐ฝ๐ฟ๐ถ๐ฐ๐ฒ ๐ผ๐ณ ๐ฎ๐ฑ๐บ๐ถ๐๐๐ถ๐ผ๐ป - ๐ญ๐ต ๐๐ฒ๐ฐ๐ฒ๐บ๐ฏ๐ฒ๐ฟ ๐ฎ๐ฌ๐ฎ๐ฑ
Most people think drawdowns mean something went wrong.
They donโt.
Every investor wants returns. Almost nobody wants the discomfort that comes with them.
But there's a part that often gets missed:
Volatility isnโt a malfunction of the market.
Itโs how the market charges you for long-term returns.
๐ฆ๐๐ผ๐ฐ๐ธ๐ ๐ฎ๐ฟ๐ฒ ๐๐ผ๐น๐ฎ๐๐ถ๐น๐ฒ ๐ฏ๐ ๐ฑ๐ฒ๐๐ถ๐ด๐ป
If returns were smooth, you would only have buyers and no sellers. It takes both to make a market. Risk is why excess returns exist.
๐๐ฟ๐ฎ๐๐ฑ๐ผ๐๐ป๐ ๐ฎ๐ฟ๐ฒ ๐ป๐ผ๐ฟ๐บ๐ฎ๐น, ๐ป๐ผ๐ ๐ฒ๐ ๐ฐ๐ฒ๐ฝ๐๐ถ๐ผ๐ป๐ฎ๐น
The cost of equity isnโt fees โ itโs behaviour.
Most underperformance doesnโt come from bad stock picks.
It comes from selling during stress and buying back higher.
Long-term returns are earned by staying put. The investors who capture equity returns arenโt the smartest. Theyโre the ones who donโt interrupt compounding.
Best,
Reinhardt.... Show More
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