17. Ernest Chan
Mutiny Investing Podcast
00:00
Compounding Growth Rate
The growth of wealth is a compounding process. A strategy would need to be combined with another strategy that it is maybe anti-corelated with or maybe even uncorrelated with in order to decrease the overall risk of the portfolio. If your return up positive every month, it beats having one month with a big positive return and another months with a big negative return. That's how adding a zero arithmetic return strategy to another strategy that has a small positive return can actually bring about a higher compounding growth rate.
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