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There are many aspects to Risk Management, most often with regard to Project Management. I've noticed that this question has been posed from the Financial area and I will therefore attempt to use Risk Management within this context. Firstly, the one posing the question must ask themselves "What is my position on risk?" By this I mean if you consider yourself to be a risk taker you may give yourself a 10, if you always play things safe you may score only a 1. Rate yourself from 1-10 for your own position. Any Financial Advisor will talk to you about different investments posing different risks. Some, more volatile, investments may be risker than others but the returns can also be far higher. You may look to manage your risk in such a way that you initially use low risk investments, ensuring you protect your primary investment, and as this grows you can use the difference to invest in higher risk investments. This way you play with the additional money generated by the investment and not with your primary investment. Alternatively, you could work at the other end of the scale and invest your primary in a risky investment, but when it works for you, you will gain far more in terms of Return on Investment (ROI) quickly than with the other method. The flip side is that you could reduce your primary investment to virtually nothing if the market goes the other way. In summary, identify your own position on risk, talk to a professional and take advice as to the best management of the risk to produce a return that you are happy with.
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∙ 16y ago
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