Choosing between volatility and permanent loss of capital?

When I was learning about fundamental investing, I was advised that I should not view volatility as risk. Rather I should consider risk as permanent loss of capital.

The problem is that if you don't view volatility as risk, you have problems reconciling using CAPM to determine the cost of capital. You also have problems using MPT concepts.

Worse still if you don't have holding power, volatility can lead to a permanent loss of capital.

It was a dilemma that took years for me to reconcile. Nowadays I consider both volatility and performance loss of capital as different perspectives of risk. I have a risk framework that encompasses both.

I now happily use CAPM, MPT together with my risk mitigation framework to manage investing risk.

For more risk mitigation insights, go to “How to mitigate permanent loss of capital in an awesome way”
https://www.i4value.asia/2023/10/how-to-mitigat...