Lesson #3: Big Returns Carry Inherent Risk
We had a 12-year track record with an average IRR of 42% through 2023.
Strong numbers, but even the best track records don’t make you immune to risk.
When conditions changed, the downside showed up fast.
Big returns always carry inherent risk, and history is no guide to the future.
The lesson: whenever you see high returns, even when the risk isn’t obvious, know it’s there. By the very nature of risk and reward, high reward always comes with inherent risk, whether it’s visible or not.
It’s tempting to chase outsized gains. But the bigger the upside, the bigger the potential downside.
Comments are closed.