I have discussed many times on my blog about my no holds barred approach to EQUITY investments. As an ERE (Early Retirement Enthusiast) I need to give my networth the best opportunity to increase during the accumulation phase of my working career. The fervent hope in this asset allocation strategy is that equities are the best way to build up a corpus.
However, there is a high price that comes with a high risk portfolio that is heavily skewed towards equity investments. Obviously it is the highly volatile nature of the stock markets, that cause this risk, and the distinct possibility of suffering significant losses during market downturns. In this post I want to focus on the magnitudes of these swings and what it means to my portfolio in terms of gains and losses. We will use some back tested data, using historical index information