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Key Takeaways

Key TakeawaysThere is no such thing as a risk-free investment. Investors can mitigate risk but should recognize that every investment entails risk.

Key TakeawaysMarkets are always in the process of incorporating new fears, beliefs, and information; hence, there is the constant presence of a “wall of worry.”

Key TakeawaysBubbles represent an extreme expression of investor behavior. Investors should not be sanguine that spotting a bubble in real time is easy.

Key TakeawaysThe flipside of a bubble is a panic. However only in rare occasions does panic selling pay off.

Key TakeawaysRisk and uncertainty are not the same thing. Financial markets generally do a decent job of pricing risk but are unable to capture the uncertainty inherent in an uncertain world.

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