Understanding the Cost of Volatility

The following two graphs illustrate why maintaining minimal volatility to avoid negative performance is important. The graph on the left shows the
increasing difficulty in overcoming negative performance as losses increase. The graph on the right shows how alternating equal losses and equal
gains yield a loss. In this example we used a 10% gain followed by a 10% loss over 10 years. Interestingly it does not matter whether the losses
come first or last, all at once or spread out, the result is always the same.