“If you don’t know where you’re going, you might not get there.” –Yogi Berra

People have different definitions of risk. Some define it as volatility, while some define it as the chance of losing money. Our favorite definition comes from Elroy Dimson: “Risk means more things can happen than will happen.”

Inherent in that definition is that risk exists in the future. And if the history of financial markets provides any lessons, it’s that the future is bound to be unpredictable and full of surprises. We study the past for guidance. We study the past to help us position ourselves in the present. And we study the past to help us keep the emotional courage to handle the unknown and unexpected when they occur.

Another one of our favorite quotes comes from investor Howard Marks: “You Can’t Predict. You Can Prepare.” We encourage both clients and non-clients alike to examine your portfolio positioning to make sure that you are aligned with the risk you want to take. If you’d like our help, reach out and let us know.