In calm markets, we all think we know our risk tolerance level.
However, it is in periods of volatility when it becomes clear whether this profile is real or just aspirational.
I have seen investors who considered themselves “very aggressive” until their portfolio fell by –28% in 2022.
It is in those moments when true risk aversion appears.
Therefore, the first step must be to define the investor profile with the utmost honesty.
For the small and medium investor
The most effective strategy is usually also the simplest:
- Select diversified assets with long-term growth potential
- Invest periodically
- Stay invested no matter what
This approach requires assuming all falls.
And here the main challenge arises: the emotional one.
The market is not the true adversary; panic and euphoria are.
At such times, financial education and calm professional guidance are decisive. Sometimes, a timely message prevents impulsive decisions that can compromise years of work.
Evolution of $10,000 invested in the MSCI World Index (January 2000 – April 2025):
- Always invested → more than $50,000 (annualized return ~7–8%)
- Excluding top 10 days → ~ $25,000 (return practically halved)
- Excluding the 30 best days → $13,597 (return <2% annually)
(Source: Vanguard UK. Link in first comment)
In high net worth
Here the logic changes:
The main objective is no longer to maximize, but to preserve and transmit.
- Protection before acceleration
- Stability before volatility
- Advanced and coordinated financial architecture
At Norz Patrimonia we have more than 20 years of experience accompanying families and businesspeople in the comprehensive management of their assets, providing the necessary structure so that an asset not only lasts, but also becomes a stable legacy.
The best profitability is one that allows you to live with peace of mind, without the need to monitor the portfolio daily.
Whatever the size of your assets – in the construction phase or already consolidated – it is essential to have rigorous and custom-designed financial planning.
By Bruno Clavell. Agent of Norz Patrimonia.