Is it Possible To Avoid Investment Loss?

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It’s really easy to look at other successful investors and believe that they always get it right. Maybe they have some kind of Midas touch or they’re on a winning streak. Today, I want to share with you a few stories on why I don’t think that’s necessarily true, and why trying to avoid loss isn’t actually necessary.  

We cover:

  • how loss is the natural consequence of diversification,
  • the story of Heinz Berggruen,
  • why you can be wrong majority of the time, but still get rich,
  • how index funds are not what you think,
  • how to play the long game with investments, and
  • key takeaway lessons of investing.

Show Notes:

00:00:00 – Intro

00:01:14 – Loss is the Natural Consequence of Diversification

00:02:44 – The Story of Heinz Berggruen

00:04:22 – You Can Be Wrong Majority of the Time, But Still Get Rich

00:05:44 – Index Funds Are Not What You Think

00:07:47 – Play the Long Game with Investments

00:09:24 – Key Takeaway Lessons of Investing

00:11:42 – Final Thoughts

00:13:31 – Outro 

Loss is the Natural Consequence of Diversification

If I think about some of the clients I’ve worked with, even in the last five years, there are a few key themes that I want to tease out as a bit of a pre frame. 

Firstly, many of us associate loss with stupidity. We think that we should have seen the signs and that things like greed or error in judgement were the root cause of that loss. And we like to tell ourselves, especially when we judge ourselves against the performance of others, that if we were careful enough maybe that loss might have been avoidable. 

The perspective that I want to put at the beginning of this particular podcast episode as a lens, if you like, is that loss is in many circles the natural consequence of diversification. Read More

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