When it comes to making investing decisions, most investors and their managers think in terms of what they already know and what already exists, rather than what they do not know and what does not yet exist. That orientation necessarily influences how investors and managers approach investing decisions. In addition, that orientation influences how investors and their managers consider the risks associated with their investing decisions.

Investing decisions and risk management, then, concern changes in such factors as those listed in the “Elements that are the customary focus of investing decisions and risk management” table on page 36. The approach and factors in the table apply at multiple, distinct levels of the investment-decision process: