If you don’t know the risks, they don’t exist…. right?
If you can’t see the risks, it means there there aren’t any…. right?
That is the Ostrich Risk Management Strategy (ORMS).
I have met many people who are blissfully unaware of how to deal with risks, and this is especially painful for me to watch when it involves finances.
I cannot tell you the number of times people have told me that since ETFs are diversified, they are the not as risky as other investments, and therefore are the best investment to buy.
Of course, this is completely wrong because as so wonderfully illustrated by Dilbert, being diversified doesn’t mean a thing if you don’t know what you’re doing.
If you wear a helmet while riding a motorcycle, does it reduces your chances of having an accident?