It has been said that the three most important rules of investing are:

Don’t lose your money!
Don’t lose your money!
Don’t lose your money!

The reason this is so important can be seen in the math of losing:

Consider the investor who starts out with $1.00 and loses half of it. This is a 50% loss. He now has only 50 cents left. What percentage gain would it take for him to get even?

Many people say 50%, because that is how much he lost. If he needed to earn 50 cents on a $1.00 investment that would be the correct answer. But the problem is that our fictional investor no longer has $1.00, he only has 50 cents left. And to earn 50 cents on a 50 cent investment requires a 100% gain.

So a 50% loss takes a 100% gain to recover from. It is much easier to dig the hole than to get back out of it.

This is why risk avoidance is such a big part of our management efforts here at Hepburn Capital. We understand what it takes to be a successful investor.

In all investing, past performance cannot assure future results, and as such, our efforts are not guaranteed. Losses can occur. All strategies offered by Hepburn Capital Management, LLC, adapt to changes in the markets by changing the investments they hold. Therefore, comparisons to broad stock market indexes such as the unmanaged indexes mentioned on this site may not be appropriate. Sometimes client accounts are invested in stocks or markets not included in these indexes. Investments made are not insured by the FDIC and involve investment risk, including possible loss of principal. Advisory services offered through Hepburn Capital Management, LLC, a Registered Investment Adviser. Adviser will not transact business unless properly registered and licensed in the potential client's state of residence.