The Wise Investor
4.6 Risk, risk management,
John was enjoying himself. Although he did not
want to rush Kate, and risk confusing her, she
seemed to be keeping up with the things he said, and
they had frequent breaks to relax and enjoy the
They had covered a great deal of ground each
day, however, and John was grateful that Kate
made detailed notes each Sunday evening.
Sometimes it took her several weeks to absorb
the things he had said, and often she had to read
over her notes many times. Still, they had the rest of
their lives, and John was prepared to take the long
haul and do the best he could to help her.
"Risk," John said thoughtfully. "Investment, like
life itself, is largely about risks.
Money management and budgeting is about
managing your cash, and investment is about
managing your assets and your risks.
Managing your risks is essential to protect your
wealth. It is also a big factor in ensuring that your
profits are strong and steady.
Risk is the chance of something going wrong. It
can be something drastic, such as a fire in a building
or a stock market crash, or something more gradual
such as the interest rate on a loan rising over time.
Any event that would have a negative impact on
your investment is a risk. You should look at all your
risks, and consider ways to reduce them.
Your primary goal in investment, apart from
purchasing quality assets, is to reduce your risks as
much as possible.
Life is full of surprises, and things never work