RiskMetrics - Risk and Opportunity


Risk and Opportunity

View risk as opportunity, and see how the ability to take calculated risk can convert potential pitfalls into gains

We can't expect to get anywhere if we avoid taking risk. History shows that great accomplishments have always involved taking significant calculated risks in one form or another. Great artists, investors, and entrepreneurs alike are willing to take risk because they see it as opportunity.

"If no one ever took risks, Michelangelo would have painted the Sistine floor."
- Neil Simon

Take calculated risk

Rather than avoid risk entirely, avoid taking poorly understood risks. Take risk only when the upside justifies the downside. The ability to understand and measure risk will empower you to make better investment decisions.

As risk relates to the chance of losing or making money, it's clear that risk is not just a bad thing. In fact, risk can hold tremendous opportunities for those who know how to manage it. Those who can't stomach risk are guaranteed to miss out on opportunities. For example, proverbial mattress stuffers (i.e., the faint hearted who don't trust anything they can't sleep on) lose in the long run when inflation erodes their purchasing power.


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