The Motley Fool Discussion Boards
|
Previous Page | |
Investing/Strategies / Mechanical Investing |
||
URL:
https://boards.fool.com/what-does-this-mean-it-means-that-the-more-34167167.aspx
|
||
Subject: Re: Ot Variance drag | Date: 3/27/2019 7:08 AM | |
Author: DrBob2 | Number: 273754 of 275676 | |
What does this mean? It means that the more volatile your returns, the lower your returns. A simple example will show this. You have 1.00. It goes up 50% the first year and down 50% the next year (or vice versa). What do you end up with. 75 cents. True, although it applies when compounding. If you have a constant position size then the regular average will work. DB2 |
||
Copyright 1996-2019 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us |