How To Lower Risk When Investing
In other words, longer held stock positions carry higher risk of losing close to 100% of the associated value according to historical statistics. Longer held short positions face higher risk of getting squeezed short, i.e. the original lender of the shares demand them back, but even that has a lower loss potential than the upside bets.
Consistent Investment Profit Takes Work
Solutions exist to mitigate or limit the above mentioned risks. Taking short positions, applying market-neutral strategies, arbitrage schemes are some of the many options available to the retail investors. Investment managers who does not acknowledge or disclose these issues imply incompetence or dishonesty, and probably do not deserve the hefty fees.
It takes dedicated self-education, then planning and flawless execution to win in this game. Like many other good things in life, complex, but not impossible. I will discuss some of these solutions in a future article.
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