What is Risk for you? You don’t know whether you took the risk if you don’t envision an alternate outcome. Risk in in the eyes of the beholder. Seeing an accident on the road reminds you of the risk involved; It may not exist in your mind before that.
My broker pushed me to buy Nation Bank of Greece bond in 2008 telling me that they don’t carry any material risk as they are almost like government bonds. Gold used to be safe haven! Now with the violent moves, it may not be any more. My 2 cents, risk is the fear of loss. It is perception which is kindled by recent experience or deeper traumatic experience. I thought Merrill Lynch was not risky at $95. But, at $6.50 BAC, I think it can go to zero!
What is safe? What is risky? It all depends on your perspective!
People tell me that they are very conservative investor, so they put money in index fund. Go figure! Until they say index down 50%. Is US treasury bond safe? Is Cash safe? Time will tell. I think not. But, I am not sure what to do about that. So many people spend lot of money and effort in doing estate planning etc. Will it work? Will this cash mean anything when your kids grow up?
But, one thing is for sure. I never cared about such things when I had nothing. And, I was still quite happy leading a risk free life. Can you give that to your kids in the ipad generation?