In the world of business, life, and investing there are many risks present.  The traditional view of risk is the probability of suffering a loss of value on your investment.  This is a very significant form of risk, but there are other equally important factors that must be considered for a full picture of risk to be formed.

Another kind of risk to be considered is the risk that your ‘safe’ investment will produce low returns that do not keep pace with inflation or do not make you any wealthier.  Preservation of capital is a viable short term strategy, but it will produce very unremarkable results if it is allowed to dominate you consciousness.

Let us also consider the risk that you will not be able to sell your investment asset when you need to.  This risk is particularly appropriate for the people that were engaged in buying and ‘flipping’ real estate properties.  When values contracted and credit standards tightened, there were many people who owned a property that was producing zero cash flow, and couldn’t be sold without incurring a significant loss.

In addition to this, it is important to consider the risk of allowing another person to manage your investments.  The highly publicized Madoff scandal provides a testament to the implicit dangers of allowing an intermediary to do your investment thinking for you.  Also consider that this risk is not limited to theft.  Investment managers tend to charge very hefty fees for their services.  These fees usually have a detrimental impact on your long-term wealth building prospects.

Finally, there is the greatest risk of all . . . the risk of lost opportunity.  People who are afraid to act because of risking failure are passed over by countless opportunities for gain.  As human beings, our perspectives are more heavily influenced by what we can see and touch.  Conversely, we tend to ignore or disregard that which we cannot directly see or feel.  Lost opportunities are unknown to the person whom they pass over, and as such are not considered.  However, opportunity is where the big gains of business, life, and investing are found.  It is critically important that the light of each person’s consciousness be allowed to shine on opportunity before it disappears into the darkness, never to be seen or heard from again.