Thomas mentioned in his video that the return does not double at 2x and used the annual performance between 1x and 2x. From this he came to the conclusion that the risk doubles, but the return does not. However, he made an example of a savings plan in which the final capital is €300,000 at 1x and >€900,000 at 2x. I also think it's important to consider that the return can very well have the 2x effect on the long run due to compound interest. Right?
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1Yr
@theflyingsquirrel Sure. You can easily see it in the different final sums in the backtest. After a few decades, a 5%pa difference quickly turns into a few hundred million dollars.
You just have to make the time series long enough, then the effect is also there with a 0.1%pa difference 😉
Thomas' backtest only goes back a few years. The effect is there too, but not as strong.
You just have to make the time series long enough, then the effect is also there with a 0.1%pa difference 😉
Thomas' backtest only goes back a few years. The effect is there too, but not as strong.
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