In this brief post, Josh gives an important lesson about investing. No strategy always works, no one is always right, so learn to accept and adapt to "volatility". For example, if the DOW is suddenly down 2,000 points and you're long stocks (and not hedged), you'll likely see a big loss in your portfolio. In deciding what to do at that moment, try not to get emotional – think of it as a challenge. Drawdowns will sometimes be larger and faster than you expected. ~ Ilene
Abilities
Courtesy of Joshua M Brown
The longer I’m doing this, the more I realize the truth of one very big idea: The ability to withstand and endure volatility is worth more than the ability to avoid drawdowns.
The good news is that enduring volatility is a more realistic ability for one to pursue and improve at.
Limiting or managing volatility is a worthy pursuit. Pretending you can avoid it altogether is delusional.
If you’re not willing to accept being down, you’ll never have the chance to be up. There’s no strategy, formula, tactic, research service or insight that can make it otherwise.
Renaissance Technologies is getting its ass kicked this year. Double-digit losses. No firm or fund has ever made more money or has employed more brilliant trading talent in the history of Wall Street. They have to lose sometimes too.
Knowing this ought to help you realign your efforts: Get better at eating the fluctuations. Dancing around them isn’t an option.
