Which in itself is reasonably fair numbers, but then I went through the rebalance periods, and see that of the 271 periods, there are 20 periods with more than -20% “Max% no slip” and 7 periods with more than -40%, with the two worst, -76% and -61%.
When investing real money, these figures appear to be extreme, and you should really have the peace of mind to sit through such periods.
Have any of you experienced such a Max% loss, or do you have any methods to protect your portfolio against such huge effects?
PS: I have tried with 20 stocks without it having much significance for the numbers above.
The Min % no slip column is the drawdown for a single stock in the portfolio, not the entire portfolio. For the return of the entire portfolio, use the Ret% column.
It has certainly happened to me that I’ve lost more than half of what I’ve invested in a single stock. It happened to me with Franklin Wireless this year and Gran Colombia Gold last year. And these were not small positions either. But my total portfolio returns are what really matter to me, and those have been very satisfying.
Well, if a stock’s prospects are the same as they were but the price is significantly less, then it makes sense to buy more. Also, logically, the future price of a stock has absolutely nothing to do with what you paid for it, because everybody paid different amounts for it at different times. So I would not use any of those techniques. I only sell stocks if their prospects seem worse than other stocks that I don’t own. And I judge prospects by a ranking system that tries to cover all the bases.