“A ship is safe in harbor; but that is not what ships are for.”
When we talk about risk regarding our savings, there is no place where we’re not taking some risk. Put the money in a savings account at a bank, and you risk losing value between the tiny amount of interest you make and inflation–what your money will buy years from now, which will likely be much less than today. Precious metals like gold and silver historically provide more stability in buying power over the long run, but they’re heavily manipulated commodities today. Stocks, bonds, and real estate have a high profit potential, but suffer from high risk at the hands of government regulation, market manipulation, and investor emotions. There are even risks to the currency we use everyday, with government printing presses all over the world glowing white hot with activity. Nations like Germany, France, Brazil, Argentina, and most recently Venezuela have suffered dramatic hyperinflations that have made their currencies worthless and their populations destitute. Collectibles, on the other hand like rare coins, art, and antique automobiles have done quite well over the years, but the risk there is not knowing what you’re doing when investing.
It’s a pretty bleak picture I’ve painted so far.
As I mentioned above, there is no place where we’re not taking some risk. So, we need to find a comfort level where we can deal with this risk. For most, that level is a point where we can handle losing the savings we risk. Buy a lottery ticket? So do millions of others. It’s an acceptable risk to lose the price of the ticket against the tremendous potential for life-changing rewards. But…millions lose, and merely pay for their lofty dream.
Inevitably, it’s how we see the reward that stimulates our desire to take a chance. The closer the goal, the faster the gain, and a strategy that’s proven with satisfying results, the more willing we are to risk. There will always be a chance that we will fail through a bad decision, but this shouldn’t be the end of our world. Learning is crucial in this life, and sometimes experience comes expensive. Don’t sweat it.
There is one other area that I’d like to discuss regarding investing, risk and reward–the cryptocurrency craze.
Bitcoin started it in 2009, and since that time, literally a thousand alternative crypto-coins have hit the spotlight. Risks are high in the field, with many soon to wither to nothing in a drive for the attention of the investor. Some that offer new technologies and that fill an important niche have potentially huge rewards ahead. And one, BitConnect, uses trading bots between Bitcoin exchanges to buy and sell, distributing its profits to investors at nearly 1% of their capital daily. Cryptocurrency is still a young market that’s gaining international acceptance, and provides more opportunities to risk capital investment for potential rewards.
So, to summarize:
- Risk surrounds us.
- We should risk funds only that we are willing to lose in our drive for rewards.
- New opportunities await in today’s technological arena.
Finally, as hedge fund manager Brad McFadden states, “You have to let go of the need to be right all the time. The key factor to successful trading is the degree and magnitude to which you are right and wrong. It’s all about risk vs. reward, not so much right vs. wrong.”
Click to register at BitConnect and see for yourself.
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