We live in a very risky world and investors should not get "carried away" with excessive allocations to equities, or for that matter, real estate. As always asset allocation and low cost and broad diversification will be essential in earning one's fair share of whatever returns our financial markets are generous enough to bestow upon us.

I was born in an earlier generation and, as a group, my classmates at Blair Academy and Princeton University were as ethical, straightforward, and integrity laden as you could possibly imagine - perhaps not a 100% - but the overwhelming majority. I've been in business a long, long time and I simply cannot imagine seeking out cheating, greedy people.

Your success in investing will depend in part on your character and guts, and in part on your ability to realize at the height of ebullience and the depth of despair alike that this too shall pass.

The fund scandals shined the spotlight on the fact that mutual fund managers were putting their interests ahead of the fund shareholders who trusted them, which had much more substantial consequences in the form of excessive fees and the promotion - as the market moved into the stratosphere - of technology funds and new economy funds which were soon to collapse.

On balance, the financial system subracts value from society

The courage to press on regardless - regardless of whether we face calm seas or rough seas, and especially when the market storms howl around us - is the quintessential attribute of the successful investor.

Reversion to the mean is the iron rule of the financial markets.