[Izverg04]

Sorry for starting a new thread on this subject, but I will try to make up by asking ineresting questions that might excite the financiers on this forum.

Currently my idea of bankroll and risk tolerance is heavily influenced by poker and other constant-stakes gambling games. I know that my risk tolerance is linked to risk-of-ruin, it grows slowly, and quantitatively I know it very well. I can comfortably tolerate risk of losing $10k with probability RoR=10^-3.

Now to make transition to investing, I have about $50k available to invest. If I assume the same risk tolerance that I have in poker, and I don't see why it is any different with investing, I realize a couple of things.

1) Stock market is quite risky by itself to me. Really, if I want to keep RoR($10k)~10^-3, I can't invest more than $20k even when I invest in a diversified stock market index.

2) Surely, I will not do any stock-picking in foreseeable future, cause even if it is possible to learn it, I've got way more profitable things to do with my time.

3) I need a hedging diversification strategy that looks beyond the equity market, if I want all of my investing bankroll to work for me. If I can come up with a portfolio of anti-correlated investments, spending maybe 50 hours/year on research and implementation, using all of my investing budget, this is worth my time.

So, how do I do make the most of my investing bankroll within my risk tolerance budget and time budget?