It might not seem like it, but the market volatility seen over the past several months is a good reason to look back at history.
Deals made in Ancient Greece and during the European Renaissance hold important lessons for investing in the 21st century.
A few archetypal mistakes have been made by investors time and again, such as ignoring conflicts of interest or failing to diversify portfolios. Understanding what has happened in the past -- the successes and failures of investment history -- can help investors profit in the future.
Here are some moments in the history of investing that contain valuable lessons.
1. The first pensions in history were land grants given to retired Roman soldiers by the government to keep them occupied and uninvolved in politics in the capital. Some evidence suggests that this system became overextended and that Roman statesmen faced a pension dilemma reminiscent of current debates over Social Security and retirement age.
2. Investment managers 2,500 years ago in Ancient Greece were most likely servant or slaves, a far cry from today's professional investors. Many ancient landowners delegated the financial management of estates to slaves, and some slaves acted as truly professional managers, assisting multiple masters with their affairs.
3. The first recorded distressed turnaround operation was described in the 300s B.C., in Xenophon's Oeconomicus. Similarly to today's buyout managers, an investor purchased problematic properties, implemented changes to improve them and sold them to new buyers who wouldn't have purchased them before the repair.
4. Diversification has always been a way to reduce risk. Both the Bible and Shakespeare reference it.
But there have always been those who ignore it at their peril.
In 14th-century Italy, two prominent banking houses piled into the military exploits of English King Edward III. His default contributed to the failure of both banks.