How Much Should You Invest in Stocks? The Art of Position Sizing in a Volatile Market

How Much Should You Invest in Stocks? The Art of Position Sizing in a Volatile Market

Our allocation to risky assets should vary based on the expected return, volatility, risk aversion, and how much we can earn risk-free. That means we should be taking less risk right now. Listen to learn why.

Topics covered include:

  • Why there are so few billionaires
  • Why the hedge fund Long Term Capital Management imploded
  • Why how much to invest is more important than where to invest
  • How the Merton share formula can assist with determining what percent of our wealth to invest in risky assets
  • Why are expected outcomes so much greater than the median outcome and why it matters to our investing


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Show Notes

How to avoid a common investment mistake - Buttonwood - The Economist

The Missing Billionaires: A Guide to Better Financial Decisions by Victor Haghani and James White

Money For the Rest of Us List of Most Influential Books

Charles Feeney, Who Made a Fortune and Then Gave It Away, Dies at 92 - New York Times

Elm Partners Coin Flip Exercise

Evaluating gambles using dynamics - O. Peters and M. Gell-Mann

Related Content

250: Investing Rule One - Avoid Ruin

Why You Should Rebalance Your Portfolio

196: How to Survive Financially

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