I asked X a question about what the average decline on the Stockholm Stock Exchange has been from a peak to a trough during a calendar year since the 1980s.

Most people guessed about 10%. That may sound reasonable, but it has actually been almost twice that.

The average decline from a peak to a trough over a calendar year is 18%. Sometimes much higher, sometimes much lower.

After this week's stock market crash, the stock market has fallen 6% from its peak.

A clear majority of active private investors underperform the index. One reason is often that they take too much risk and sell at the wrong time.

Over long periods of time, the stock market has returned about 8% per year with a risk of falling about 50%. How much of a decline can you handle? The best strategy is the one we can sustain over time. The last thing we want to do is sell out at the wrong time. The focus should always be on protecting capital and focusing on the process.

There are simple methods to minimize these declines. It's not about pinpointing peaks or troughs.

For example, we can build portfolios with lower volatility. Read more about these strategies in this blog post.