![]() ![]() In investing, tortoises tend to win far more often than hares over the turns of the market cycle. His talent to simplify complex ideas, like those above, into a short sentence or two was impressive. Most important, Bernstein had a way with words. But in so doing, diversification seizes surprising opportunities elsewhere. So risk is something to be protected against and diversification is the answer. ![]() The question to ask, according to Bernstein, is what if you’re wrong? Are you prepared for the consequences of that? Risk is simply the outcome we don’t expect. ![]() Uncertainty rules but risk isn’t always a bad thing. Yet, the riskiest moments in markets are when investors en masse expect a similarly certain future.īernstein knew that risk results from not knowing the future. Probabilities, not absolutes, are the best tools we have to make investment decisions. Investors usually go wrong the moment they are certain of what comes next. Behavior that is often driven by our experiences or lack thereof. Decades of experience gave him an inside look at the complex interplay between investor behavior, risk, and uncertainty.īernstein knew that realized risk was a byproduct of investors’ behavior. Peter Bernstein understood markets better than most. ![]()
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