What are the biggest risks to me at this moment? Are the risks I had earlier in life still relevant? What are my blind spots and how can I divest myself of some of the burden? Is self insuring for me?
We all know life happens. Preparing for the unexpected is an important piece of financial planning. Preparation can take many forms: having a game plan, setting funds aside, or making a premium payment to offload the risk onto someone else.
What is Risk Management?
In the financial world, risk management is the process of identification, analysis, and acceptance or mitigation of uncertainty in investment decisions.
Essentially, risk management occurs when an investor or fund manager analyzes and attempts to quantify the potential for losses in an investment, such as a moral hazard, and then takes the appropriate action (or inaction) given the fund’s investment objectives and risk tolerance.