Chapter 20
Ten One-Minute Risk Management Tips
In This Chapter
Setting up for success with planning, patience and knowledge
Paying attention to the right things
As much as I try to simplify financial risk management in this book, I realise that parts of it require a lot of work, including long thought, careful communication and extensive analysis. However, you can do a lot of good in risk management just by taking a minute and doing something simple. Here are ten examples.
Fear the Market
This directive may seem a strange one because to work in finance is to rely on the market for your living. But a sailor relies on the sea for her living, yet she still fears it. If you ever feel like you’ve beaten the market, or that it’s your friend or that you know what it’s going to do stop immediately and gin up some fear! Think over your market failures, or historic disasters or anything else that puts you in the right frame of mind to make financial decisions.
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You do not understand the market. You do not own the market. You’re not important to the market. But the market often understands you, and it owns all your assets and liabilities, and it is important to you. In those circumstances, a ...