As we grow older, wiser, richer, or poorer, our perception of what risk is and our aversion to taking risk will shift, sometimes in one direction, sometimes in the other. The answers to these musings will enlighten the construction of your portfolio and suggest how large a role equities should play in your investment strategy. In most cases, they'll form the foundation for meeting any long-term investment goal, such as college or retirement. But in an interview I had several years ago with Paul Samuelson, the Nobel laureate in economics, he emphasized that whether equities make up a modest portion or the bulk of your long-term investment portfolio depends on your individual attitude toward risk. You have to always sell down to the sleeping point.
Berlin believes that sentence captures one of the great intellectual divides.
The first kind of intellectual and artistic personality belongs to the hedgehogs, the second to the foxes. Investing often attracts hedgehogs. But hedgehogs, beware. Now it's stocks. But no matter how smart you are, you can't get rid of investment uncertainty, and no one really knows what investments will shine going forward.