Risk is certain.
If you look at an index over a long time, there are loss years. If you see risk as the possibility of having a loss, you will find the stock market troubling.
You could invest in things where there is no apparent way to lose. That is risky too. Burying $100,000 in a box in your backyard has risk. Even if you ignore the risk of having the money stolen or deteriorating, there is risk. When you dig it up some other day, it will likely buy less than it did when you buried it.
You have as much money but considerably less purchasing power. That is a loss.
The question eventually becomes what will you do when the market falls?
Things to think about
Risk of loss is different. You must close the position to have a loss. That is a problem if you must do it. So be careful of leverage. Know when you need the money. Learn enough about markets to have faith. Reign in the greed. Have reasonable expectations.
The biggest factor in managing risk is managing yourself. Be sure you know how that factor works.
Don Shaughnessy arranges life insurance for people who understand the value of a life insured estate. He can be reached at The Protectors Group, a large insurance, employee benefits, and investment agency in Peterborough, Ontario.
In previous careers, he has been a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.
Please be in touch if I can help you. email@example.com 866-285-7772