Capital Destruction: Drawdowns vs Downside Deviations – ValueWalk Premium
Capital Destruction Drawdowns Downside Deviations

Capital Destruction: Drawdowns vs Downside Deviations

If you had to choose between experiencing drawdowns and experiencing downside deviations, which would you prefer?   Anyone working in product development in asset management will tell you downside deviations are 10x as bad as drawdowns.

Bridgewater Reveals Uncorrelated Strategy, Volatility & Beta Targeting

Let’s define each so we’re on the same page.  Drawdowns are declines from peak value – invest $100, it grows to $120 and then your investment value declines to $60. That’s a 50% drawdown (120-60 . . .

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