Considering Both Gains and Losses in Risk Assessment

Risk should be viewed as the probability of both loss and missed gains. While people tend to focus more on avoiding losses, missed opportunities are also a significant risk factor. Investors, especially those working for others, are typically more concerned with avoiding losses than with missing out on potential gains. It is essential to consider both aspects when assessing risk, recognizing that both outcomes carry negative implications. Understanding the range of possible outcomes and accounting for uncertainty are crucial components of comprehensive risk evaluation.