A recent Barron’s article offers insights from Oaktree Capital Management co-founder Howard Marks on the recent uptick in market volatility.

Here are some highlights of Marks’ comments:

• The market is no longer in an “optimistic” phase. “For some reason,” Marks said, “because of the way investor psychology works, people switch from only seeing the good to seeing only the bad. So, what I said nearly a month ago about the market being in an optimistic mode turned out to be very fragile.”
• Marks said the stock market is “a little rich, but I don’t think it’s highly overvalued.” It is also unpredictable, he adds, contending that “this could be the beginning of a down leg or not—but you just can’t attach too much intelligence to the market’s daily fluctuations.”
• Today’s market calls for defensive strategies, according to Marks. “It’s not 100%, but at this point, I would worry more about losing money than I would about missing opportunities, and it is time for caution.”
• The two most important things for investors to consider are “managing risk and understanding where you are in the cycle.” With regard to the latter, said Marks, it is important to focus on the mix of offensive versus defensive investments in a portfolio. “If you get the offense versus the defense right, it doesn’t matter really what you pick,” he argued, adding that this is more important even than stock-picking. “If you could have turned cautious in 2005, 2006 and aggressive in late 2008 and early 2009, it didn’t matter what you did. It didn’t matter what asset classes you chose.”
• Keeping emotions under control is key. “Investing is not easy; making money isn’t easy,” he said, but “if you are disciplined, if you study, and if you keep your emotions under control, then you can do these things.”