With the markets going down in price and up in volatility, I tend to ponder the nature of risk.? Here’s a quote from management guru Peter Druker:

Every decision is risky: It’s a commitment of present resources to an uncertain and unknown future. Risks can be minimized if you know when a decision is necessary, how to clearly define a problem and tackle it directly, and that you’ll have to make compromises in the end. You haven’t made a decision until you’ve found a way to implement it.

He was talking about business decisions, but I think it applies to investing or trading decisions quite well…

I think it brings the point home quickly — when we buy a stock or other financial instrument, we’re committing present resources (money, margin, time/our attention) to an unknown future in the hopes of accomplishing our goal (to make money on the trade/investment).

Do you know how to define your problem?? How you’ll implement your decisions?? I know I need to do some work in that area…