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    • Chapter I: The Lie of the Average
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Averaging Up

Category: Compounding

The Volatility Tax and How to Defeat It: A Mental Model for How to Survive the Maths of the Market

Posted on December 12, 2025December 12, 2025

We are all taught the same fundamental truth of investing: Stocks go up over time. We are shown a chart of the S&P 500 moving from bottom-left to top-right and told, “Just buy, hold, and wait.” For the index, this is true. But for individual stocks, this is often a dangerous lie. The reality of…

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