Ideal Risk
Disclaimer: Please note that all content and information in this blog are for educational and informational purposes only and should not be taken as professional investment advice.
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Risk is the probability of harm materialising. In other words, uncertainty. But unlike risk, uncertainty is not inherently bad and undesirable. Uncertainty is both good and bad. Too much uncertainty is certainly bad but no uncertainty is certainly not good either. Life would be both mundane and boring without uncertainty. Living a life of perfect certainty is not living at all. If you already know all that will happen, you have already lived through it all, and therefore whatever we are living now is merely a repetition of what you have already lived through, through your foresight.
An aspect of risk is uncertainty. To be perfectly certain of an outcome is not necessarily a good thing. To have zero risk is to eliminate uncertainty, meaning the possibility of there being a different outcome. Risk is inherent in life. Without risk, there will only be one outcome in life — certainty. In other words, there won't be two outcomes. There will be just one, and only one outcome. In short, a perfectly predictable life. It may sound great but it means life is predictably certain and therefore predictably monotonous and boring.
Uncertainty (risk) is part and parcel of life and should be embraced. Life becomes fulfilling when an uncertainty leads to a reward. If everything is predictably perfect, there will be nothing to look forward to, because everything is expected. If you can expect everything that will ever happen to you, there is little purpose in living. To live is to embrace uncertainty, to embrace uncertainty is to embrace life.
When we seek to minimise risk, we are not saying we seek to eliminate risk but rather to minimise it for a given level of return. We cannot eliminate risk but we can manage, mitigate and minimise it.
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Disclaimer:
The content and information provided on this blog is solely for educational and informational purposes, and should not be construed as financial advice. The accuracy or completeness of the content and information provided in the blog cannot be guaranteed. Before making any investment decisions, it is important for readers to research and carry out independent verification of the information provided, or consult with a qualified financial professional. No warranty and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of actions taken based on the ideas or information found in this blog.
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