Answers Quote by Burton Malkiel
“J.P. Morgan once had a friend who was so worried about his stock holdings that he could not sleep at night. The friend asked, 'What should I do about my stocks?' Morgan replied, 'Sell down to your sleeping point' Every investor must decide the trade-off he or she is willing to make between eating well and sleeping well. High investment rewards can only be achieved at the cost of substantial risk-taking. So what is your sleeping point? Finding the answer to this question is one of the most important investment steps you must take.”
About This Quote
Source Book: “A Random Walk Down Wall Street”, 1973
Investors must balance risk and reward, choosing a “sleeping point” where risk is tolerable enough to rest easy.
In simple terms: Find a risk level that lets you sleep peacefully.
Key Takeaway
Set a personal risk tolerance and stick to it.
Themes
finance
risk management
investment
Mood
analytical
pragmatic
Type
financial
strategic
When to use this quote
- Portfolio planning
- retirement saving
- stress reduction
Key Concepts
Utility theory
risk‑reward trade‑off
Questions to Reflect On
- What is your current sleeping point?
- How will you adjust it as life changes?
A Different Perspective
Risk tolerance changes over time; reassess regularly.
