Imagine you have some savings to put to work for the next year. You can leave the money in a safe bank account, or you can buy shares of a company, or maybe a bit of both. How much should you put into the risky stock? That is the static portfolio choice problem — the simplest possible investment decision: you decide today, you hold until the end of the year, and you never adjust anything. In this chapter we will work out the rules that guide that choice, and we will find a surprising result: under fairly mild conditions, every investor, no matter how rich or how much they dislike risk, should hold exactly the same mix of risky assets, just scaled up or down. That idea, called two‑fund separation, is one of the great organizing principles of finance.