I’m very reluctant to take leverage now. This index strategy in leverage of factor three was usual because you leverage up very high, you go down, leverage up very high, you go down. Now my leverage factor on the long side is max 1.3. and 1.4. It’s like it’s a lot of unexpected downside risk. Sometimes, especially as if you have a momentum and trend following strategy and you like to add up, for example, reverse strategy, it makes sense to take the extra risk for a short time because the statistical edge is so high. Yet, on the other hand, I also need to be capable of holding it emotionally. My willingness to take leverage as a way decreased right down, along with my willingness to take risks.

If I would’ve been a little bit more risk seeking the last couple of years, I would’ve made so much more money. However, I was very much concerned about my risk return ratio. Instead of having 50% annual return, I could have easily made maybe 25%. But I didn’t because I put my investment level low, and I didn’t want to go below minus 15%. That’s a learning to know managing risk is important and on the other hand, you can also over-manage your risk and you lose a lot of capacity to make the money or returns you can actually make. That’s two big learnings.