Risk and the Smart Investor

Master the most important investing skill of all-DECISION MAKINGDe-risking your investments requires knowing that there is much you don't know.-David X MartinRisk exists because of one simple fact: Decisions are always based on incomplete information. Therefore, to meet your investment goals over the long term, you must learn to manage the risks associated with a decision-making process that is by nature flawed. Risk and the Smart Investor provides a framework for making such decisions.Avoiding unrealistic promises of completely risk-free investing, world-renowned risk management expert David X Martin familiarizes you with the principles of risk management. Based on Martin's experience in managing risk at several of the world's largest financial institutions, this principlebased approach presents a unique perspective that helps you manage the risk in every investment you make.Risk and the Smart Investor provides not only a framework for managing risk in today's markets, it also prepares you to handle the next financial crisis-which is coming, sooner or later-by separating risk management into four separate processes: Assessment-know where you are, but accept the fact that you cannot know everythingThe Rules of the Game-determine your appetite for risk, diversify accordingly, demand transparency, and institute checks and balancesDecision Making-consider all alternatives, fit your plans into specific time frames, and always have an exit strategyReevaluation-continually monitor the outcomes of your decisions and learn from your mistakesPraise for Risk and the Smart InvestorInteresting and instructive. A good book for those who want to learn about risk and build this knowledge into their financial decisions.-John Reed, former CEO, CitigroupDavid Martin has produced a popular yet serious post-financial crisis reflection on the fundamentals of risk management as a living process. Rich in experience and wisdom, Risk and the Smart Investor is both a useful handbook brimming with insights, and a moral tale for our times. Simply a must-read for every serious investor, risk manager, and just about everyone else.-Michael Power, professor, London School of Economics and Political ScienceDavid Martin knows risk and the active investor and his book proves it.-Jerry LiebermanThis book is like having your own mentor to guide you through risk management decisions.-William Rhodes, Chairman, Citigroup and Citibank