Oftentimes investors spend substantial time and energy evaluating the returns of their portfolio, comparing those results to some popular market benchmark like the S&P 500. However, there are serious considerations that must be understood to avoid common mistakes that often lead to a negative impact on dollars. While returns matter, at the end of the day it’s growing your dollars that counts. When it comes to investing mistakes, one of the biggest is not understanding how our risk (measured by volatility) impacts results. Bigger drawdowns take longer to recover, and that extra recovery time is lost compounding. Down markets and long recovery times interrupt compounding. Making matters worse, the deeper the drawdown the bigger the returns have to be just to get back to breakeven. You can see this is the table below. Most investors understand the table above. If you lose half, you have to double up to get back to even. The classic “double-or-nothing”. What they don’t always realize is how drawdowns and volatility impact the dollar results one needs to achieve their goals. The table below illustrates this fact. The mean return