This does not mean that the markets are exempt from violent fluc-
tuations. Since the future will always be uncertain, psychology and sen-
timent often dominate economic fundamentals. As Keynes perceptively
stated more than 70 years ago in The General Theory, “The outstanding
fact is the extreme precariousness of the basis of knowledge on which
our estimates of prospective yield have to be made.”^16 Precarious esti-
mates are subject to sudden change, so prices in free markets will be
volatile. But history has shown that investors who are willing to step
into the market when others are running to the exits reap the benefits of
market volatility.CHAPTER 16 Market Volatility 287
(^16) Keynes,The General Theory, p. 149.