Master Investors use one of the four-risk avoidance strategies:
1. Don't invest.
2. Reduce risk (the key to Warren Buffett's approach).
3. Actively manage risk (the strategy George Soros uses so astonishingly well).
4. Manage risk actuarially.
There is a fifth risk-avoidance that is highly recommended by the majority of investment advisors: diversification. But to Master Investors, diversification is for the birds.
No successful investor restricts himself to just one of these four risk-avoidance strategies. Some - like Soros - use them all.
1. Don't invest.
2. Reduce risk (the key to Warren Buffett's approach).
3. Actively manage risk (the strategy George Soros uses so astonishingly well).
4. Manage risk actuarially.
There is a fifth risk-avoidance that is highly recommended by the majority of investment advisors: diversification. But to Master Investors, diversification is for the birds.
No successful investor restricts himself to just one of these four risk-avoidance strategies. Some - like Soros - use them all.
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