To: Paul Senior who wrote (74265 ) 11/16/2023 4:41:08 PM From: petal 1 RecommendationRecommended By
Respond to My point is, the $ sum doesn't matter, all that matters is the CAGR and the percentage of your total capital that the portfolio constitutes. I think that the logic there is so obvious so as to not need further explanation. (And while it might be psychologically harder to lose, say, 1 million USD out of a total of 2 mn – especially as that sum would in all likelihood be the result of many years of hard work and savings – 1k out of a total 2k is the exact same thing, just at an earlier part of the snowball accumulation process – and massive ("permanent") losses here are just as harmful as at any other stage.) before starting one's compounding? not diversifying early on, as I see it, is to get just that learning experience of how horrible it feel to lose everything or nearly everything. (And this result – the worst of results – is of course better to experience when the capital hasn't yet grown large; this may be an argument to take on larger risks when sums are small. But again, why not do that experience with 1 % of the initial 3k, instead of all of it? Money is still money, regardless of denomination – many small rivers make a big stream, etc. etc...)
