Risk Is a Four Letter Word: The Asset Allocation Approach to Investing

Raymond B. Blake is director of the Centre for Canadian Studies at Mount
Allison University and the author of Canadians at Last: Canada
Integrates Newfoundland as a Province.

As more and more Canadians turn to mutual funds and other types of
investment, the number of books giving investors advice has
proliferated. Hartman’s message is different from that of many of his
contemporaries, because he does not offer advice on what specific
investment vehicles to purchase; instead, he develops a practical
framework for investors, which will give them the confidence to make
sound investment decisions.

In his investment framework, Hartman defines three basic classes of
assets: cash (bank deposits, T-bills), debt (bonds), and equity
(stocks). He suggests that investors develop an investment statement,
taking into consideration their personal philosophy, investment
objectives, asset allocation, and security selection. He also suggests
that investors focus on risk rather than return, since risk tolerance
will often set the rate of return they can realistically expect from
their investments. Whatever an investor’s risk tolerance, the best
investments, he advises, will often be mutual funds, because they pool
resources, provide diversification, and are managed by professionals.

First published in 1992, Risk Is a Four Letter Word became a national
bestseller. This revised edition provides more sage advice.