InvestorQ : Risk comes from not knowing what you are doing.”
Mohammad riyaz made post

Risk comes from not knowing what you are doing.”

Answer
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natasha Samani answered.
3 months ago


I will agree to the statement a lot, though not completely, as there’s another side to it as well. The first fact about risk is – it is everywhere, you cannot completely turn down the agitated risk in anything you do, there’s always room for some. So, sometimes even though when you know what you are doing, there would still be risk involved. To be precise, does not matter how many calculations you do, there shall be some unpredictable risk.

Let us understand this with an example, Suppose, you are planning to invest in the stock market, you are an expert in your field and without a doubt, you have calculated the maximum risk that shall be involved if you that particular task. You know what you are doing and you believe that is the best you can do it. You even prepared yourself for a big market crash due to unavoidable factors such as a natural calamity, or a big company failure, or a big scam, all of it. However, what occurred was a pandemic and we cannot think to get out of it for at least a year but what you planned was short-term and this came as a surprise, no one was ready. This risk is unavoidable and certain.

The worst you could have done was to enter the market without even knowing the risks involved and not any deep understanding of the subject matter. You just dipped in and didn’t know where you are headed. This is the biggest risk you could have taken in your entire life.

So, not knowing what you are doing can invite unwanted risks, maybe the worst decision of your life to move ahead in that direction but sometimes even knowing where you are going could be riskier than you think.