Overview
Main description
Master the most important investing skill of all—DECISION MAKING
“De-risking your investments
requires knowing that there is
much you don’t know.”
–David X Martin
Risk 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 everything
- The Rules of the Game—determine
your appetite for risk, diversify
accordingly, demand transparency,
and institute checks and balances
- Decision Making—consider all
alternatives, fit your plans into specific
time frames, and always have an
exit strategy
- Reevaluation—continually monitor the
outcomes of your decisions and learn
from your mistakes
Praise for Risk and the Smart Investor
“Interesting 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, Citigroup
“David 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 Science
“David Martin knows risk and the active investor and his book proves it.”
—Jerry Lieberman
“This book is like having your own mentor to guide you through
risk management decisions.”
—William Rhodes, Chairman, Citigroup and Citibank
Author comments
David X Martin is senior vice president for AllianceBernstein, which has more than $450 billion in assets under management. Formerly chief risk officer at
AllianceBernstein, he also has held senior risk management positions at Citibank. Martin was founding chairman of the
Investment Company Institute's (ICI) Risk Committee and has lectured at the graduate schools of business at MIT, Columbia University, and NYU. He has written articles for
The Bankers Magazine, the journal Pension & Investments, and the AEI-Brookings Joint Center Web site. He and his family live in the greater New York metropolitan area.
