How You can be Unprofitable with Recompound
How You can be Unprofitable with Recompound
Yes, you read this right. We are actually writing how you can be unprofitable, even with us.
Yes, you read this right. We are actually writing how you can be unprofitable, even with our services. This is the 2nd edition of honesty is the best policy.
Before we begin, lets clearly state two crucial points:
We cannot predict the stock market movement with 100% certainty.
You can cancel our services anytime.
Investing as a Game to Maximise Expected Value of Portfolio
For point number one, we’d like to underscore that investment is a probability game. Our job is to maximise the expected value of your portfolio given the misprice of the assets that are considered cheap.
If there is a good chance that the market will recognise that misprice and the price appreciates, our expected value of the portfolio will grow. Nonetheless, it is of paramount importance to realise that there is still a chance that the market goes the other way. Important reminder that when someone sells a stock (causing a downward pressure in price), it does not mean that stock is inherently bad. It might be simply because that person needs the proceeds from selling right now.
Having this in mind, it does not mean that we abandon our investment framework or strategy. It is still worthwhile to make decisions based on expected value calculations as eloquently championed by a famous investor, Ray Dalio from Bridgewater Capital.
You can Cancel Our Services Anytime
There is no lock up. Your money is still with you. So you are the ultimate decision maker (the CEO) of your life. You decide if you want to fire us, your Chief Investment Officer (CIO) if you like.
Now given the dynamic nature of the stock market as elucidated previously, it is very possible that your portfolio experiences a drawdown. If you think that that is not acceptable, you can cancel our service.
Here’s an example of a performance chart of one of our clients that joined on the 3rd of March 2023.
The drawdown is -5.97% because that was a mini stock market crash back in March and we could only react as swiftly as possible to minimise the damage. But the damage was there nonetheless. If our client cannot stomach the drawdown and cancel the service immediately, she would have made a loss. Her investments with Recompound is unprofitable.
However, she is committed that the partnership with Recompound is designed to be long term oriented and we rebalanced the portfolio to maximise the expected value of portfolio growth. This is how her portfolio stands as of June 2023:
10% in 3 months as a whole? not bad, but can be better. If she decides to end the service today, she would have been profitable. However, her portfolio of stock investments will always be work in progress as long as she is subscribed to our services.
Closing Remarks
Stock market is volatile. You can cancel our services anytime. If you cancel our services when you are experiencing a short term drawdown, you will be unprofitable. But if you stick with us for the long term, your chances are much, much better especially when our incentive is aligned with yours.