Thread by @RamBhupatiraju

"4 Simple Rules To Protect Your Portfolio From Yourself" h/t @EconomyApp 👏👏

Excellent article for the current environment (with big drawdowns in many high growth including some quality Co.'s)

My fav parts from the article in the thread below. ⬇️

seekingalpha.com/article/441568…

"The real threat to your portfolio is not volatility. It's your ability to cope with it. As a result, your portfolio doesn't need to be protected from volatility. It needs to be protected from yourself." 👏

"Volatility refers to how dramatically the price of an investment may change. On the other hand, risk refers to the probability that an investment will underperform the market or result in a permanent loss of capital."

"In short, a stock that sees very large swings in its price over time may be a less risky investment than one that barely moves. The true risk over a long timeframe depends on the underlying business more than the sheer volatility of its share price."

"How much volatility can I tolerate?"

That's the key question that we all need to answer, but it might be the wrong way to tackle the question of temperament.

But I believe most investors should go one step further. In my view, the right question they should ask themselves is:

"How can I better tolerate volatility?"

"The whole reason stocks tend to do well over time is because they make you put up with stuff like this (volatility). It's the cost of admission. A feature, not a bug." - @morganhousel

My fav parts from the four fantastic recommendations in the article.

1⃣ Invest a fixed amount in any given month.

2⃣ Define your max allocation to a stock

3⃣ Don't add to your losers

4⃣ Don't sell your winners

Conclusion 👏