How to Decrease Risk & Increase Return – Introduction

The goal of every investor, the goal of learning to be a better investor, ultimately comes down to this, learning to simultaneously decrease risk while at the same time increasing return.  Remarkably the two are linked as we’ll see in subsequent posts as we explore the principles behind doing so.  It is possible as proven by some investors who have consistently delivered high returns over long periods of time.

What will follow are a series of principles to help you do so.  There’s something important to understand though, these principles do not function in isolation.

No one strategy will prevent you from losing money while increasing returns

Each approach has holes in it, does that mean you can’t make money with it?  No, you definitely can as people have proven.  However, you can also make money playing the lottery; it’s just not consistent or predictable.  Our goal here is to achieve consistent and predictable results.

To achieve consistent and predictable results we need to pay attention to each of the principles and strategies, we need to discipline ourselves to their use.  That’s not always pleasant, but it is wise, ultimately, in the long run, we’ll end up way ahead by doing this.  So always remember:

All the principles synergize together to produce consistent results but ONLY together

What follows then is an exploration that started with Warren Buffet’s first rule of investing, how not to lose money.  It is not enough just to understand the rule, it is critical to understand HOW to follow it.  The principles that follow will allow us do so.

If you’ve got investing questions you’d like to discuss or like us to cover please click in the lower right corner of the screen to send it to us, looking forward to hearing from you.

Continued on next part