Minimize your losses...
If you have 100,000 dollars and you lose 50% you are left with 50,000.
If the next year you make 50% return you only have 75,000...
It takes twice as much return to make up for losses.
Because it takes more risk to attain higher rates of return some are enticed into trying to make up for the losses by investing in higher risk products or opportunities that avail them the chance to get back to even... Sometimes that works but more often than not the downside on products, which promise abnormally high returns can be large short term losses only further crippling your portfolio.
The moral: be careful, find a consistent long term play that has high probabilities of achieving minimal downside losses, while still offering realistic upside gains.
Just some food for thought,
Louis
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