Message Font: Serif | Sans-Serif
 
No. of Recommendations: 3
(read 5% swing at portfolio wide or with 3% of SPY)

Not sure what this means. What is "5% swing at portfolio wide"? Are you saying 5% max drawdown? You can't take hardly any risk at that level.

Roughly speaking, I would think you could shoot for 8-12% returns if you are willing to tolerate a 30% drawdown.

Really though...the question is the wrong question to begin with. There is an old maxim "manage the downside risk, and let the returns take care of themselves". In my experience, people get into trouble when they start thinking in terms of certain returns to target. I think it is more useful to think in terms of what is the maximum tolerable downside drawdown I can tolerate.
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement