At the CFA Society Portland’s Annual Investment Strategy Dinner last month, Oaktree Capital co-chair Howard Marks said the two most important factors for investing success are managing risk and understanding where we are in the market cycle. This according to an article in CFA Institute.

“We never can be sure of an outcome,” Marks told the audience, “but I think we can get the odds on our side by understanding where we are in the cycle.”

Marks believes that making money in the market isn’t necessarily difficult, particularly if an investor takes on a higher-than-average level of risk. “The measure of a great professional, “he said, “is making money with the risk under control.” The level of risk, he explained, depends on where we are in the economic cycle—when high in the cycle, risks are high and potential returns are low (the opposite is true early in the cycle). But he swears off macro forecasting. He said: “if we can have an idea when the market is at an extreme position, I believe that can help us increase or decrease our aggressiveness or defensiveness in a timely fashion.”

Patience is one of the most important attributes of a successful investors, according to Marks, who added that important events are tied more to psychology than to fundamentals—and psychology can neither be predicted nor timed. Regarding emotion, Marks argued that “it starts with the question of whether or not you accept that the big errors and the big swings in investing come from psychology or emotion, not from changes in fundamentals. If you do, then ask whether you accept the importance of being on the right side of that.” In order to outperform, says Marks, you have to be willing to “do something different, and I think the main difference comes in refusing to be part of the emotional swings.”