Risk and Uncertainty in a Complex World


We try to avoid risk and often miscast uncertainty for risk. While they’re both a fact of life, it’s valuable to understand the difference between the two. Uncertainty and risk are related concepts in economics and the stock market. The concepts are related, but not the same. You cannot avoid risk, every act of creation involves it. Even not doing anything has a risk component. But you can learn to move away from uncertainty, especially when you’re called to make important decisions. Dynamic nature of risk Since risk is defined as unknowns that have measurable probabilities, we can insure against…

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