Howard Marks, co-chairman of Oaktree Capital, says “the most important thing that an investor has to do . . . is to set the balance in his portfolio between offense and defense.” He continues: “For the last four years, we’ve had a position that can be summed up as ‘move forward, but with caution. . . . I think you have to favor caution.”

Regarding high yield bonds, Marks said the inference from recent activity may be that they seem riskier, “but the math is that they are a better buy now” than previously. He does not buy such bonds to trade however, and evaluates them in terms of whether it makes sense to hold them to maturity.

The deep thinking investor, Marks, quotes Henry Kaufman, an economist, who once said there are “two types of people who lose money, the ones that know nothing and the ones who think they know everything”.