Dynamic Allocation

Variability Drain: The Silent Killer of Long-Term Compounding

• Fabio Capela
• Systematic investing , Portfolio mathematics , Compounding , Risk management , Quantitative finance , Volatility management , Long term investing , Portfolio optimization

You spend years refining your strategy. You optimize your entries and exits. You backtest it across decades. On paper, it shows strong returns. Maybe even impressive alpha. But something keeps bothering you. Despite solid average returns, your portfolio isn’t growing the way you expect. You’re not losing in any dramatic way — no catastrophic drawdowns, no obvious mistakes. But something subtle is bleeding your wealth. Quietly. Relentlessly.

Why I Never Use Stop Losses (And You Shouldn't Either)

• Fabio Capela
• Risk management , Investment strategy , Portfolio management , Systematic investing , Trading psychology , Position sizing , Market volatility , Investment discipline

“You should always use stop losses.”

I’ve heard this advice countless times from financial advisors, trading courses, and investment books. It’s supposed to be one of the fundamental rules of risk management—set a level where you’ll cut your losses and stick to it no matter what.

How I Built an Investment Strategy That Beat the S&P 500 by 8% Annually for 8 Years

• Fabio Capela
• Systematic investing , Portfolio management , Investment performance , Market outperformance , Risk management , Asset allocation , Quantitative finance , Financial strategy

Eight years ago, I was frustrated. Like most investors, I was putting money into index funds and watching my portfolio swing wildly with every market tantrum. The conventional wisdom said I should just “buy and hold” the S&P 500, but watching 20% drawdowns every few years while barely beating inflation didn’t feel like a winning strategy.