Capital Preservation
My investment plan is designed with one objective in mind – to maximize the portfolio performance while at the same time using the power of compounding to grow my wealth. My respect for compounding leads me to have a strong emphasis on managing downside risk. This is very important because the damaging power of "reverse compounding" can be extremely destructive to a portfolio. Most investors are familiar with the magic of compounding interest but they fail to realize that it works in reverse as well.
That is why I always look at the downside risk first before looking at the upside potential. I never chase the market and I never break my risk management rules no matter how "good" a trade may look. I play a defensive game and maintain a modest return target of 20-30%.
Long-Term Trend Following
I am a hardcore trend follower. I do not day-trade or scalp the market. As trend follower, I wait for the market to move first and then follow it. I never predict market direction. Trend trading demands a high level of self-discipline and patience to follow precise rules based on price action alone. As long as price data is available, all else is inconsequential. Media, fundamentals, broker opinions, talking heads, and so on are simply not necessary to profit.
Ultimately, all I seek is one thing: To enjoy long-term consistent profit with total peace of mind.
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