OR... you can take a portfolio with low drawdowns and leverage it and get much better returns over the long haul while still keeping a managable risk profile. Additionally, many investors sell during drawdowns which ultimately costs them dearly on returns.rocketdog wrote: ↑Tue Dec 31, 2019 1:46 pmPeople obsess over max drawdowns WAY too much. Unless you're in retirement (or close to it) you should ignore drawdowns entirely. In fact, you should greedily view them as ideal buying opportunities.
The market only took 3 years to completely recover from the Great Recession, and that was after a drawdown of 40%! So if you were a buyer of stocks during that period (rather than selling in a panic), then you made out like a bandit.
"Be greedy when others are fearful, and fearful when others are greedy." - some smart investor guy
In the end, drawdowns could be ignored but rarely are and lower average investor returns significantly.