Hi friends I m Vibhor Goyal and i am going ot give you my version of risk taking.

People always think that dealing in equity is one of the riskiest options that capital markets offer to the investors. From this pops out a question"What exactly is risk"?. According to me , no one has an answer that tells what exactly risk is. Risk may be defined as a "probability of loss" or "an element we can insure against". But because no one knows the exact probability of risk, no one can be fully insured against all risks.

So, there is no proper definition of risk. Its severity varies with the perspectives of each person.There may be a guy who thinks that walking on the roads is risky because there are too many vehicles.Does that stop us from walking on roads? For some people working in a coalmine is not risky because they are used to that work and there is no other choise.

This is exactly the case with Capital Markets. There are too many choices with the investors. They usually prefer having a Fixed Deposit, and giving away there hard earned money in the hands of their banker to make fortunes for himslf and the bank.

there is another striking fact.People assume risk differently in different situations.a man who is sitting on a gain of Rs 3000 in a stock would either sell it, or hedge it. For him its too risky to hold on. But if he has incurred a loss of Rs 3000 in a script with very little chance of recovery would prefer to hold it because he still has a chance. Even if it means futthur losses.In these situations Traders become Investors and viceversa.

Most of the retail investors trade im the markets without having even the basic financial education about the functioning of the stock exchanges. They rely on speculative bets and run out of the markets like SCARED DOGS once they get there hands burnt.They then start cursing the markets and the government for their misery without considering that it was there greedy decision and not the decision of the government to invest into share markets.

Most people rely on their earned income to fulfill their needs which in case if 95% of the individuals is not enough. They dont put their money to work and share the load of there consumption needs with them.

What Robert KIyoski said in his all tiem best seller book"Rich Dad Poor Dad" That "there are 3 types of income":-

• Earned Income
  
• Portfolio Income
  
• Passive Income

Those people who are neterprising enough to take all the risks and enter into a business venture are the ones who are likely to earn this Passive Income which usually mean big bucks.