The 70% Rule: The Decision-Making Edge of the World’s Smartest Investors

Every investor wants to make smart, informed decisions, but in a world of infinite data and limited time, the pursuit of perfect clarity can be a trap.

 

In volatile and complex markets, the difference between average and exceptional investors often boils down to one thing: the speed and confidence of decision-making. And yet, many institutional and professional investors continue to wait - wait for macro clarity, wait for data confirmation, wait for complete consensus.

 

But history, and some of the sharpest minds in global investing, suggest that waiting for certainty is not only inefficient, it’s costly. Enter the 70% Rule: a mindset embraced by leaders like Jeff Bezos, Ray Dalio, and Howard Marks. The principle is simple - act when you’re 70% sure, not 100%.

 

Because by the time you reach full conviction, the opportunity may have already passed.

 

The institutional case for acting at 70%

 

In institutional investing, perfectionism is often confused with prudence, but the best CIOs know when “good enough” is a green light. Let’s be clear: the 70% rule is not about recklessness or speculation. It’s a decision-making framework rooted in expected value, agility, and confidence in course correction.

 

Jeff Bezos famously wrote in his 2016 shareholder letter that most decisions “should be made with about 70% of the information you wish you had.” His rationale? Speed trumps precision, especially when decisions are reversible. In markets, this applies directly to portfolio rotation, geographic reweighting, and sector allocation.

 

Whether it’s re-entering emerging markets, reallocating toward private credit, or backing long-term energy transition themes, the cost of delay is real - in alpha, relevance, and sometimes, job security.

 

From Buffett to Dalio: Embracing imperfect information

 

The world’s most successful investors have always understood that trying to know everything before acting is both unrealistic and unnecessary.

 

Investment legends have consistently operated within the 70% zone, though they rarely use the term.

 

· Warren Buffett makes billion-dollar bets based on fundamental confidence, not complete data. His edge isn’t clairvoyance; it’s the discipline to act when the odds are just favourable enough.

· Ray Dalio’s ‘Principles’ emphasise radical transparency and constant iteration. He doesn’t wait for complete clarity; he builds feedback loops to adjust as reality unfolds.

· Howard Marks cautions against the illusion of precision. In his memos, he reminds investors that the future is unknowable, and all we really have is probability, not prophecy.

 

All three agree on this: trying to be right 100% of the time means you’ll act 100% too late.

 

How the 70% rule applies to today’s investment environment

 

Today’s macro backdrop demands agility more than certainty - smart capital is already repositioning ahead of the crowd.

 

Across asset classes, the 70% mindset can unlock opportunity:

 

· APAC Equities: Broker sentiment is rotating in favour of Asia. China’s stimulus, India’s growth, and Southeast Asia’s digital expansion are all in motion. Perfect visibility isn’t coming, but current macro signals justify considering positioning ahead of the curve.

· Private Markets: Long-Term Asset Funds (LTAFs) in the UK are giving structured access to alternatives and waiting for every risk to be legislated or back-tested forfeits early-mover advantage.

· Digital Assets: Hong Kong is issuing licences, launching ETFs, and enabling institutional access. The investor who waits for global regulatory harmony will simply miss the cycle.

· Liquidity Strategy: In the UK, cash is back at the table. Holding cash is rational, but only if it’s a springboard, not a hiding place.

 

The real risk isn’t being wrong, it’s being late

 

Many investors overestimate the risk of being wrong and underestimate the opportunity cost of hesitation. The behavioural finance angle is critical here. Decision paralysis, often cloaked as diligence, can cause underperformance that compounds - not just financially, but reputationally.

 

Professional investors know the difference between analysis and over-analysis, between caution and fear. The best CIOs, family offices, and portfolio managers act with confidence at 70%, and then adjust because they understand that alpha lives in the execution, not in the wait for perfection.

 

Conclusion: Professional conviction requires imperfect courage

 

In the end, the real edge belongs to those willing to move through uncertainty with discipline, not wait for it to vanish. The 70% rule is not a shortcut. It’s a discipline. It’s about knowing when enough information is enough, and trusting your framework, your team, and your ability to adapt.

 

If you’re a professional investor staring at a compelling thematic, AI infrastructure, APAC rotation, LTAF exposure, or green industrials, and you’re 70% sure?

 

Move. Pilot. Allocate. Reassess.

 

Waiting for perfect clarity is comfortable, but markets don’t reward comfort. They reward conviction over uncertainty. So, what’s the next 70% you need to potentially act on?

 

#InvestmentStrategy #InstitutionalCapital #DecisionMaking #GlobalMarkets #BehavioralFinance

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