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To Win You Have to be Willing to Lose

Oct 19

While taking a loss is never easy, the point that Ben Carlson is trying to get across in his piece,  To Win You Have to be Willing to Lose, is that losses are a big piece of being within the equity markets.  Carlson backs up in point with some interesting facts;

  • Just over 50% of all annual periods since 1950 saw a 10% correction or worse. So every other year investors had to deal with double digit loss at some point throughout the year. To be specific, there were 34 years with a double digit drawdowns. But 20 of those periods actually finished the year with a gain. So almost 60% of all years with a drawdown in excess of 10% still finished the year in positive territory. This includes three years that finished the year with a gain despite the fact that they experienced drawdowns of -25.9%, -27.6% and -33.5%.

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