How To Mitigate Risks When Value Investing

Fundamentals 03: Risks differ depending on the type of assets and investment style. This post looks at risk and risk mitigation from the perspective of a stock-picking value investor. Revision date: 22 Aug 2020 "Risks come from not knowing what you are doing" Warren Buffett When you invest in equities, the goal is of course to get a better return compared to keeping monies in fixed deposits. Unfortunately, the returns from equity investment are not guaranteed. There will be times when you will make less than what you can from fixed deposits. Worst still there will be times when you lose all your investments. The challenge is how to mitigate against them. There are 2 schools of thought when it comes to risks Those that treat risk as some form of variance Those that consider risk as permanent loss of capital This post is about how to mitigate against permanent loss of capital. This is because I look at investments from a long-term perspective. Any variance is a paper lo