Investment Strategy to Think About
Been reading and watching Nassim Nicholas Taleb, and I do love lots of his stuff…
Something that came up this week that I thought was very cool was his investment strategy, which was this. Invest:
- 90% of your wealth in really dull things like government bonds that are very very low risk
- 10% of your wealth in large variety of hugely high risk and different things.
The overall outcome becomes:
- No chance of you loosing much.
- By spread betting all the high risk bets in many things, you overall have a low risk portfolio.
- By having many high risk bets there is the outside chance that you could hit really big …ie investing in Uber at the very early stage.
Hence you end up with a low risk investment, with a low risk performance most of the time but the chance of huge return.
Minimise the downside, whilst maximising the chance of the upside happening.
This can be applied easily to Angel investing using SEIS in the UK…..The angel investing is the high risk stuff, but due to the tax breaks the downside is minimised whilst still allowing the upside.
Doug
Ps, This is not official info just my view.