Key Principle No. 16

Volatility is not a risk.

We do not accept much of what is taught as modern financial theory. It has been our experience that in the long-run higher returns are not generated by portfolios with above average volatility. Increasing a portfolio’s “Beta” will not increase its long-term returns.

We believe that higher returns are generated by portfolios that make you feel uncomfortable.

We expect that our model portfolio will make you feel uncomfortable.

 

We find that this chart is more true than not

We have found that this graph is more true than not

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