Minimising a portfolio’s losses in falling markets is far more important to long term investment success than maximising gains in rising markets. This paper examines the importance of upside/downside capture, and is part two of a trilogy series outlining the principles behind Koda’s investment philosophy: diversification, upside/downside capture and time in the market. Parts one (‘The Upside of Maintaining Diversification‘) and three (‘The Upside of Time in the Market‘) are also available on Koda’s Insights page.
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