The Tortoise and The Hareall over again

Compare the impact of loss on a portfolio:

  • Bob [the hare] invests $10,000 and takes more risk to get a higher return; he gets a 12% return for 4 years, but loses 12% year five, and ends up with $13,847

  • Sally [the tortoise] invests $10,000 and takes less risk to get a moderate return; she gets an 8% return every year for 5 years, and ends up with $14,693.

  • Bob would have felt a lot better than Sally for 4 years. It would, in fact, take a lot of willpower for Sally to stick with her investment strategy, but if she did, she would have done 22% better then the high risk strategy! 



The Impact of Higher Risk and Loss







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