To many of us, the word “risk” has a negative connotation.
We would much rather take less risky decisions than to take riskier ones and bear the chance of large negative consequences.
However, I would like to propose that risky situations provide opportunities as well.
The Chinese characters for risk, “Wei Ji”, illustrates this connotation well.
Source: Stillwater Consulting
The character on the left, “Wei”, represents danger, while the character on the right, “Ji”, represents an opportunity.
The juxtaposition of these two characters, tell us that danger and opportunity are always present in risky situations.
In finance and investing, we are faced with the same prospects too. The key is to navigate the investing landscape with both dangers and opportunities in mind.
Understanding The Types Of Risk In Finance
In investing, there are different types of risk that we should take into account.
Here, I will just share about