Our Downside Risk levels represent an investor’s risk threshold. A X% Downside Risk portfolio means that in the next 39 out of 40 years, the portfolio should not lose more than X% of its value in a given year.
In other words, an investor who chooses a 15% Downside Risk portfolio is comfortable with the 97.5% chance that their portfolio will not lose more than 15% in a given year.
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