--- title: "Meaning & Key Takeaway of: There are only a few things investors can…" description: "\"There are only a few things investors can do to counteract risk: diversify adequately, hedge when appropriate, and invest with a margin of safety. It i..." image: "https://sms4smile.com/quotes/i/c5b/seth-klarman-1979_appropriate_there-are-only-a-few-things-investors-ca_2860196.png" --- # There are only a few things investors can do to counteract… ![“There are only a few things investors can do to counteract risk: diversify adequately, hedge when appropriate, and invest with a margin of safety. It is a precisely because we do not and cannot know all the risks of an investment that we strive to invest at a discount. The bargain element helps to…” quote by Seth Klarman](https://sms4smile.com/quotes/i/c5b/seth-klarman-1979_appropriate_there-are-only-a-few-things-investors-ca_2860196.png) [Download](https://sms4smile.com/quotes/i/c5b/seth-klarman-1979_appropriate_there-are-only-a-few-things-investors-ca_2860196.png) [Open image](https://sms4smile.com/quotes/i/c5b/seth-klarman-1979_appropriate_there-are-only-a-few-things-investors-ca_2860196.png) > “There are only a few things investors can do to counteract risk: diversify adequately, hedge when appropriate, and invest with a margin of safety. It is a precisely because we do not and cannot know all the risks of an investment that we strive to invest at a discount. The bargain element helps to provide a cushion for when things go wrong.” [Seth Klarman](https://sms4smile.com/quotes/author/seth-klarman/) ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. Investors must manage unknown risks by diversifying, hedging, and buying at a discount for safety. **In simple terms:** Diversify, hedge, buy cheap to protect against unknown risks. Key Takeaway Use margin of safety in investing. Themes risk management investment strategy diversification Mood cautious analytical Type financial advisory When to use this quote - portfolio construction - risk assessment - financial planning Key Concepts margin of safety hedging discounted investing Questions to Reflect On - How do you determine an appropriate margin of safety? - When is hedging most effective? A Different Perspective Diversification alone cannot eliminate all risk. ★ ★ ★ ★ ★ No ratings yet [Bargains](https://sms4smile.com/quotes/about/bargains/) [Customer](https://sms4smile.com/quotes/about/customer/) [Elements](https://sms4smile.com/quotes/about/elements/) [Investing](https://sms4smile.com/quotes/about/investing/) [Investment](https://sms4smile.com/quotes/about/investment/) [Investors](https://sms4smile.com/quotes/about/investors/) [Risk](https://sms4smile.com/quotes/about/risk/) [Safety](https://sms4smile.com/quotes/about/safety/) [When things go wrong](https://sms4smile.com/quotes/about/when-things-go-wrong/) ## Related quotes > [If you invest and don't diversify, you're literally throwing out money. People don't realize that diversification is beneficial even if it reduces your return.…](https://sms4smile.com/quotes/jeff-yass/if-you-invest-and-don-t-diversify-you-re-literally-throwing-out-money/) Jeff Yass > [Diversify, because that helps reduce risk. 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