1. About Returns

Assuming you have 1 million, when the return reaches 100%, your assets will reach 2 million. If you then lose 50%, it means your assets will return to 1 million. Clearly, losing 50% is much easier than earning 100%.

2. About Price Fluctuations

If you have 1 million, after a 10% increase on the first day, your assets will be 1.1 million, and then after a 10% decrease on the second day, your assets will remain at 990,000. Conversely, if you drop 10% on the first day and then increase 10% on the second day, your assets will still be 990,000.

3. About Volatility

If you have 1 million, earning 40% in the first year, losing 20% in the second year, earning 40% in the third year, losing 20% in the fourth year, earning 40% in the fifth year, and losing 20% in the sixth year, your assets will remain at 1.405 million, with a six-year annualized return rate of only 5.83%, which is even lower than the coupon interest rate of a five-year treasury bond.

4. About Earning 1% Daily

If you have 1 million, if you can earn 1% every day and exit, then after 250 days, your assets can reach 12.032 million, and after 500 days, your assets will reach 145 million.

5. About Earning 200% Annually

If you have 1 million, if you achieve a 200% return rate for five consecutive years, after five years your assets will reach 243 million, but such high returns are very difficult to sustain.

6. About Ten Times in Ten Years

If you have 1 million and hope to reach 10 million in ten years, 100 million in twenty years, and 1 billion in thirty years, then you need to achieve an annualized return rate of 25.89.

7. About Averaging Down

Assuming you bought a certain cryptocurrency at 10 yuan for 10,000 yuan, and now it has dropped to 5 yuan. If you buy another 10,000 yuan, your average cost will drop to 6.67 yuan, not the 7.5 yuan you might expect.

8. About Holding Cost

If you have 1 million and invest in a cryptocurrency with a profit of 10%, when you decide to sell, you can leave 100,000 yuan in market value, which will bring your holding cost to zero, allowing you to hold long-term without pressure. If you are extremely optimistic about this cryptocurrency and leave 200,000 yuan in market value, you will find that your profit will increase from 10% to 100%. However, do not be complacent, because if the currency later drops by 50%, you may still incur a loss.

9. About Asset Allocation

With a risk-free asset A (annualized return of 5%) and a risky asset B (return -20% to 40%), if you have 1 million, you can invest 800,000 in risk-free asset A and 200,000 in risky asset B. Your worst-case return for the year could be, and the best return could be 12%. This is the prototype of the CPP technology applied to capital preservation funds.

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