Of all the truisms that Warren Buffett has come out with over the years, perhaps the most important one for investors to understand is this: "Risk comes from not knowing what you’re doing."  Most investors, including many professionals, are simply unable or unwilling to acknowledge how little they actually know, or the risk that they’re taking as a consequence. Smart investors, by contrast, know their limitations and, instead of trying to predict the future, simply buy and hold a broadly diversified investment portfolio.