Stop drawing lines on charts.
Since 2000, the worst drawdowns our strategy experienced were around -22,10% (on a month-to-month basis).
During the same time period, the MSCI World index had a major drawdown losing around 56,18%.
The performance of the MSCI World Index, three years after it began its decline leading to this maximum drawdown, was -44.64%, representing an annualized drop of -17.89% (meaning you would have lost an average of 17.89% per year). Over the same period, our strategy would have grown your wealth by 11.71%, at an annualized rate of 3.76%.
When markets trend down – why stick around if you don’t have to?
“The market always comes back.”
Maybe. But do you have time to wait years/decades to get back to breakeven?
If you’re near or in retirement and lose half your portfolio, your budget will quickly go from catamaran to cat food.
