Home Info-Graphs Stop Loss Truncates Downside & Increases Upside

Stop Loss Truncates Downside & Increases Upside

When you purchase through our sponsored links, we may earn a commission. By using this website you agree to our T&Cs.

Stop Loss Truncates Downside & Increases Upside - #RiskManagement #ChartOfTheDay

 

  • We ran 1,000 simulations of a randomly selected 10-stock portfolio from a global universe. The portfolios were re-selected and re-balanced every year
  • The 1,000 random portfolios with stop loss beat the benchmark 97% of the time and generated an average return of 12.2% p.a.
  • Adding the stop loss to the top decile results in 8% higher terminal wealth
  • Adding the stop loss to the bottom decile results in 45% higher terminal wealth
  • Stop loss truncates the downside and increases the upside

 


DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article.

Our Editorial Standards

At ValueWalk, we’re committed to providing accurate, research-backed information. Our editors go above and beyond to ensure our content is trustworthy and transparent.

Want Financial Guidance Sent Straight to You?

  • Pop your email in the box, and you'll receive bi-weekly emails from ValueWalk.
  • We never send spam — only the latest financial news and guides to help you take charge of your financial future.