Questions
1. Evaluate your reason to invest in the market
.a. Do you see this as a short-term scheme?
b. Do you see this as long-term wealth accumulation?
2. Confirm your risk threshold
a. Can you handle a double-digit drawdown to get a double-digit profit per annum?
b. Can you absorb a single-digit percentage drawdown for a long time or a
double-digit drawdown for a short time?
3. Diversifying asset managers
a. Would you rather invest all your money with one asset manager?
b. Would you spread out the risk by investing in several managers? c. Would you ensure that your asset managers are employing different strategies
and systems on different financial instruments?
4. Approximating future risk
a. Would you use Ulcer Performance Index to approximate future risk?
b. Do you use value at risk (VaR) to approximate risk?
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