You can explain standard deviation and risk adjusted returns to the average investor until you are blue in the face, and they just won't get it. Nick Murray, advisor to investment advisors, brokers, etc., and noted author and speaker on this subject, apparently understands and embraces what I have just discussed. Let's take a look at Japan. Also, the Japanese investor is different from his American counterpart, they said. He won't panic and sell.
Fear transcends all cultures and time horizons.
Panic is an irrational extension of fear. Real people buy high and sell low. It's tough to keep your cool when all those around you are losing theirs. Avoid Major Loss. We allocate assets into a portfolio of several asset classes that have a low correlation with each other, and then manage the risk in each asset class.