Higher risk must be accompanied by higher potential reward. We know this intuitively, but still try to reduce risk wherever we can. That’s great! We should do that! But market risk cannot be reduced to zero and when we are investing for the long-run, we want high returns. To get that, we have to accept more volatility and that’s what the stock market provides. Even a well-diversified portfolio will move up and down with the markets, so let’s structure a portfolio we can live within the good times and the bad!