YOU—NOT YOUR INVESTMENT MANAGERS—HAVE THE MOST important job in successful investment management. Your central responsibilities are to decide on your long-term investment objectives and determine a reasoned and realistic set of investment policies that can achieve your objectives—with or without the help of a professional investment advisor.

You should study your total investment situation, your emotional tolerance for risk, the history of investment markets, and how they would interplay, because a mismatch between the market’s sometimes grim realities and your financial and emotional needs can result—and as recently as 2008 did result—in great harm.

Investors who study past realities of investing will be able ...

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