Jackie Stewart, “The Flying Scot”, won three world drivers’ championships in Formula 1 racing during his eight-year career. He told an interviewer once that his goal in each and every race was to win that race at the slowest possible speed. The interviewer was confused. What did he mean? Stewart explained that it made no sense to him to risk a wreck or mechanical failure by pushing the car any faster than he needed to in order to finish first. Whether he won by a meter or a mile, it did not matter - it was still a win. Jackie Stewart was notorious for his smooth and effective driving style. Now you know the mindset that guided him in taking that smooth approach. You should have a similar mindset in setting your portfolio. Choose the asset allocation that has the greatest chance of allowing you to reach your goal with the least volatility along the way. If you can reach your goal with an 8% average annual return, don’t risk “crashing” by attempting to get 10%.
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http://www.investopedia.com/articles/basics/08/allocation-in-one-step.asp?Page=2
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