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Investing Specialists

How to Assess Your Insurance Needs

You manage risk at the portfolio level; here's how to address it in other parts of your plan.

One of Warren Buffett's most famous maxims is that there are two rules of investing. The first rule is to not lose money, and the second rule is not to forget the first rule.

From an investment standpoint, Buffett isn't saying to avoid volatility altogether; you need to be able to withstand periodic fluctuations in your investments in order to make money in the long run. Instead, it means managing risks in an intelligent way: diversifying sensibly across asset classes, reducing risk as retirement draws close, and setting aside liquid assets to meet unanticipated expenses.