The Pain of Giving It Back

Philosophical note for veriolab.com. Educational only. Not investment advice.

You know this feeling

You made money. Then you watched it leave.

That is not the same as never having made it. Your brain knows the difference. So does your body.

This is not about being down from your starting point. It is about being down from the number you started to believe was yours.

Reference points shift without permission

Nobody decides to anchor to the peak. It just happens.

When your portfolio crosses a new high, something clicks. You start spending those gains in your head. You imagine the updated version of your life. You feel a quiet sense of arrival.

Then the market takes some of it back. And now you are not just managing a drawdown. You are grieving something you thought you had.

This is why going up and then down can feel worse than having never gone up at all. How many people, despite being still fortunate, have gone crazy losing what they had?

The problem compounds with scale

When you are early in your career, losses sting. When you have a larger balance sheet, they hit differently.

A 15% drawdown on seven figures changes what you think is possible. It creates friction in conversations you did not expect. It shifts how you see yourself.

You can be financially secure and still hate this. That does not make you irrational. It makes you aware that money carries emotional weight.

A hedge is partly behavioral infrastructure

Here is the uncomfortable part:

Sometimes you pay for protection because of how it changes your behavior, not just your returns.

If a small annual cost means you stay invested through a moment where you would have otherwise capitulated, that cost might be the most valuable line item in your portfolio.

Call it behavioral insurance. Call it regret minimization. Call it whatever.

The point is that a hedge can matter even when it bleeds.

The tradeoff is real

There is no magic here.

A hedge program you can actually hold will have quiet years where it looks like a drag. It will also have moments where it feels like it saved you from a decision you would regret.

The question is not whether the hedge made money.

The question is whether it helped you stay in the seat.

One visual

A simple diagram: two paths to the same ending portfolio value. One is smooth. One has a sharp peak, a deep drawdown, and a recovery.

Same outcome. Very different experience.

Questions worth sitting with

• What number in your head feels like a line you do not want to cross again?
• If you were down sharply, would you be tempted to de-risk at the wrong time?
• Would you pay a small annual cost to reduce the odds you make that decision?

Takeaway

Not everyone needs hedges. Some people ride volatility without flinching.

But if you know that "giving it back" changes how you think and act, it is worth building around that truth.

The portfolio you abandon is the portfolio you do not own.

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Verio Labs provides modeling, analytics, education, and strategy development. We are not an RIA, broker-dealer, or CTA. We do not manage assets or give trade recommendations.