After reading the article titled “An Ugly Market’s Lessons for Investors”, by S. Anano, which appeared in the Wall Street Journal of October 5, 2008, answer the following questions.

a. Explain the pros and cons of diversification between safe assets and risky assets.

b. Why is attention to your asset allocation set up (strategy) still important?

c. What is the impact on assets (and financial markets) or investors becoming more risk-averse?

d. What are some of the lessons investors learned from the recent financial experience?

e. What is the meaning of “sleeping well while eating well”?