Risk is everywhere. Most of the time we do not realize it, but it is always present.
Some risks we might experience include:
- Automobile accidents
- Emergency-room visits
- Divorce
- Injuries requiring treatment
- Stroke, heart attack, or other serious illness
- Being laid off
- Cancer, Alzheimer’s, Parkinson’s, or other serious disease
- Becoming a victim of crime
- A sudden death in the family
The COVID-19 pandemic reminded people around the world how risky life really is. Health, freedom of movement, income, and investment values were affected at the same time.
During good times, it is easy to forget risk. The best way to predict the future is to plan for it. Take a step-by-step approach: consider possible health events, job loss, family needs, who would act, and how expenses would be paid.
The future is unknowable, but thoughtful planning can reduce the impact of many risks and reduce anxiety. Some things remain outside our control, even with proper planning.
-Paul R. Rossi, CFA