Buffett and Munger’s Strategy to Shield Your Portfolio from a 50% Market Drop
Key Takeaways
- Charlie Munger, who died in 2023 at the age of 99, argued that enduring an occasional 50% drop is crucial for any investor seeking substantial long-term gains.
- Market leaders such as Berkshire Hathaway, Amazon, and Apple have all had major drawdowns but recovered by staying focused on their fundamentals.
- Avoiding risk can result in lower returns that fail to keep pace with inflation.
Charlie Munger, the former Berkshire Hathaway vice chair who died in 2023, argued that investors must be prepared for a brutal reality: If you can’t stomach a 50% decline in your portfolio, you’ll never achieve exceptional results.
While many hope for an easy path to wealth, Munger’s rule remains one of the most straightforward and…
