Risk vs Optimism
31 May 2024Markets can remain irrational longer than you can remain solvent.
~John Maynard Keynes
What is risk, and why is the evaluation of risk important when investing? What is optimism, and why is optimism deadly when we are investing?
Managing Investment Risk
Thoughts about risk are expressed in this 72-second video.
Our Choices
Since investing is risky, we have two choices:
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We can run away from risk. Of course, the problem with running away is that we cut ourselves from potential upside.
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We can evaluate the risk rationally. And decide (using business creativity) how to take steps that will mitigate the risks.
If you’re driving down a road and you see a pothole, you can turn around and avoid the road altogether. Or, if you’re a skillful driver, you can navigate around the pothole and minimize the impact on your journey.
Which path do you prefer?