A prediction about an uncertain future is just an opinion and should not determine anyone’s investment decision. Many people learn this the hard way. Markets have always rewarded discipline – having an investment philosophy, a strategy to manage risk and sticking to it is the surest way to reap success when investing.
Warren Buffett is known for offering his investors these words of wisdom on more than one occasion. He intended to remind investors that everyone can look like a genius in a bull market, but undisciplined investing can leave you vulnerable during market downturns. Understanding and managing your risk is our number one job. Protecting against changing regimes and worst-case scenarios while providing exposure to growth is quite the balancing act. Still, financial science has proven that we can do it.