Definition of a Risk Taker

in #investing5 years ago (edited)


Investing has risk. There is no two ways about it. Some investments have very marginal risk while others have much more volatility, either way you need to take risks if you want to invest.

Definition of a Risk Taker


Do you know what the definition of a risk taker is?

It is...

  • Someone who steps into the game without already knowing the answer.
Here's the thing - we never know the answer.

We can analyze a bunch and put the odds well in our favor, but you do not know 100% how an investment will play out, well atleast any one that includes even a morsel of speculation.

Acceptance and Educated Decisions


If you want to invest in things such as stocks, cryptocurrencies, real estate, etc. you need to recognize what the variables are and accept you cannot control the outcomes of them - only how you decide and react to them.

The best bet is to educate yourself the best you can on the given assets class and then make calculated and educated decisions to put probability of a good outcome in your favor.

Final Thought


That all this post really was, just a thought about risk taking and how we should view it and what we need to accept and realize if we truly want to be a risk taker, a.k.a-speculator.


Published by ScaredyCatGuide

on

with SteemPress
https://mentormarket.io/scaredycatguide/definition-of-a-risk-taker/


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The concepts discussed in this article related to risk are very important and any investor should know the risk they are taking in any investment that they are involved in. Looking at an investment that yields 4% vs. 15% usually come with very different levels of risk and if one purely looks at return the 15% investment would win hands down but that investment most likely comes with a significant amount of risk that needs to be understood and weighed before making a decision. Great returns do not usually come with out increased risk!

Yes, exactly. Factoring in risk by looking at metrics like beta and Sharpe ratio help us factor in the impact of risk against reward.

Absolutely spot on! Knowing the factors that make risk possible is half the battle!

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