Investing Has An Emotional Price To Be Paid

Contrary to what many investment gurus would have you to believe, there is always a price to be paid for any gains made through investments. At least those achieved in any structured fashion besides just Blind, Dumb Luck! To achieve any level of performance in investing, one must always realize that there is an equal and commensurate level of risk and drawdown that comes with this performance. The greater the potential return, the greater the drawdowns which will ALWAYS come in regards to any particular asset class or investment strategy.

The systems that are used in the Lussenheide Investment Warrior attempt to maximize return and reduce risk as much as possible. However, as a broad based rule, whatever rate of annual return that you are trying to achieve, you must be able to bare a negative drawdown of an equal amount. For example, if you are trying to achieve a 12% annual return, you must expect at least once every five years to be "upside down" and have your portfolio lose 12% of its value from a given top in value of your portfolio . From lower risk Bonds to the most aggressive investing this rough rule of thumb holds true. The greater the return , the greater the occasional drawdown. Drawdowns are the ugly side of investing that uncaring promoters never want to discuss. They are inevitable, and understanding them, their severity and their frequency is key to enduring and sticking out a sound investment strategy.

All legitimate systematic strategies, in different ways, will test you and your resolve to stick with it. Bad investing results from not enduring these occasional "bouts of doubt" and either abandoning the strategy or switching to another. Persistence is the key!


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Important Disclaimer:

The financial markets are risky. Investing is risky. Past performance does not guarantee future performance. This document is prepared solely for informational purposes and is not a solicitation, or an offer to buy or sell any security. Opinions are based on historical research and data believed reliable, but there is no guarantee that future results will be profitable.

The Lussenheide Investment Warrior Report does not advocate trading futures or options. Any mention of commodity futures contracts or options contracts and/or prices in this publication is for illustrative purposes only. This is not an endorsement or recommendation of any commodity futures market nor in margin trading. This is not an endorsement or recommendation of any option market. The risk of loss when trading futures and options is substantial. You can lose more than your original investment.

Any information contained in the Lussenheide Investment Warrior Report and any trading signals from Bill Lussenheide may contain statements that are the opinion of the author. The information and opinions contained in the market letter and signals are believed to be correct, however the information is not warranteed or guaranteed in any way. The subscriber may use the information provided at his or her own risk. No representation is being made that the information will produce trading profits. In no event shall Bill Lussenheide or his family , be held liable for any special, incidental, or consequential damages, whatsoever (including: without limitation, trading losses or any other losses incurred) arising from the use or inability to use the information contained in his  publications, or from delays or failures in the electronic delivery of the publications.