Financial Risk Quotes

“Leverage is a two-edged sword. The edge that can cut you, cuts deeper.”
― Naved Abdali

“Companies should assess and mitigate financial risks because doing so safeguards their financial stability, protects investments, and ensures they are better prepared to weather economic uncertainties. By identifying and managing potential risks, businesses can reduce the likelihood of adverse financial events and maintain a strong, sustainable financial position.”
― Hendrith Vanlon Smith Jr.

“Leveraging is not evil but must be used with extreme caution and care. You must understand that over-leveraging is the prime reason for all market blowups.”
― Naved Abdali

“Everybody does some sort of diversification. It is the extent and broadness that varies according to risk tolerance.”
― Naved Abdali

“it is not a calculated risk if you haven’t calculated it.”
― Naved Abdali

“There is a considerable information bias that exists among different levels of market participants. The majority of the information is not available to everybody, nor does everybody decide after considering all relevant information.”
― Naved Abdali

“The perceived risk and actual risk are two different things.”
― Naved Abdali

“Prices are easy to understand, and it is easy to isolate or pick assets based on prices. Understanding the businesses and analyzing the risk is complex.”
― Naved Abdali

“When people hear others’ stories about becoming overnight millionaires, they act upon it and invest their life savings, their houses, and their retirement funds.”
― Naved Abdali

“Your decision to invest, or not to invest, should be based on pure economics. There is no moral obligation to invest. For moral causes, do charity, do not make investments.”
― Naved Abdali

“Cash in your bank account is as safe as the creditworthiness of your banker. No more, no less.”
― Naved Abdali

“All common investments have a great feature; the maximum amount you can lose is your capital.”
― Naved Abdali

“The combination of our natural desire to be better than our peers, our faulty assumption of dodging risk, and our flawed belief of having better chances than others, pushes us into excessive greed territory. We take more significant and sometimes fatal risks.”
― Naved Abdali

“If you are leveraged five times of your capital, a 20% move in your preferred direction can double your capital, but a similar move in the opposite direction can wipe you out.”
― Naved Abdali

“If you have a leveraged position, make sure nobody can take it away.”
― Naved Abdali

“I believe when using leverage, the following four conditions must be met. 1. Leverage must be in the general direction of a secular trend. 2. Leverage should never expire. 3. Leveraged positions should not be subject to forced sell. 4. The maximum possible loss should not be more than the invested capital.”
― Naved Abdali

“The actual risk is the permanent loss of capital or, to a lesser extent, a sub-par return. Temporary volatility in market price is not a real risk.”
― Naved Abdali

“When you invest in stocks or any other asset, your primary risk is the permanent loss of capital. Your secondary risk is a sub-par return, and that’s it. You don’t have any other risk.”
― Naved Abdali

“It is foolish to believe that cash in the form of bills or your bank account is not exposed to any risk. Sure, it is.”
― Naved Abdali

“Cash is a debt instrument issued by a sovereign government, and all debt instruments are subject to the creditworthiness of their issuers, so is cash.”
― Naved Abdali

“Your investment in a bank account is as secure as your bank is. If your bank goes bankrupt, so does your investment.”
― Naved Abdali

“In a rising price environment, people tend to throw analysis of risks out of the window. In their mind, the only possible risk is not to join the party.”
― Naved Abdali

“People like to risk pennies to win dollars.”
― Naved Abdali

“Analyzing prices is not wrong. However, picking inflated prices as your only source of information is terrible.”
― Naved Abdali

“Investing without a clear understanding of associated risk is like a child is playing with fire. Risk assets are called risk assets for a reason.”
― Naved Abdali

“No investor can have a successful career without a sufficient understanding of fear and keeping it in check.”
― Naved Abdali

“An investment business has certain risks, and your job as an investor is not to eliminate all risks but to manage and minimize them.”
― Naved Abdali

“Don’t be fearful of risks. Understand them, and manage and minimize them to an acceptable level.”
― Naved Abdali

“No investment is without risks, and no opportunity is guaranteed. Nothing is certain. And if somebody claims it, stay away from that person.”
― Naved Abdali

“FEAR OF FAILURE IS BORN FROM THE LACK OF REQUIRED SKILLS!”
― Aryan Chaudhary, Your Last Step To Fast Financial Freedom