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Ryan Van Riper
Mrs. Schuler
English 12
3 November 2010
Risk Management
Was there a time when someone wanted to take a risk? Whether the risk was being
aggressive in sports or taking a chance in life, they all took a chance every day. Businesses are
no exception to this. They take risks, but they manage their risks better than others. With risk
management, there are facts, money tips, procedures, investments, and an emotional story
that many people may not know about.
There are many facts about risk management. For one, “there are seven different types
of risk management; financial, process, intangible, time, human, legal, and physical” (“What”
par.10). I did not know that there were that many different types of risk management in today’s
world. Noninsurable risks are part of financial risks. Businesses must always have enough
supplies to meet the demands of their customers (Burrow 493). This is true, because if they do
not have enough supplies, the business will lose customers. They must also be aware of the
economy’s current state. They must stay ahead of the curb and anticipate risks to take, and
how to manage them (Burrow 493). Knowing what the economy will do will help businesses
with deciding what to do. A way to reduce risk is to plan. Planning anticipates and prevents
problems from harming or even stopping its operation (Burrow 489). Stopping problems before
they even start is really important to any business. The main fact is that every organization
must realize that they will face a risk. They will risk their resources to reach a needed objective
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(“What” par.5). When businesses risk their resources, they sometimes risk some of their own
money as well.
Money is always involved in risk management, but there are some tips you need to
know. For one, brokers do not discuss the drawbacks, but do discuss about the benefits of
leverage (Russell par.2). Brokers are very tricky businessmen. Research shows that some funds
lower the level of risk when managing risks (Burrow 463). That is very important when deciding
which funds to use. When investing, a demo, or fake, account, simplifies everything and is
easier than a real account (Russell par.2). Real accounts are more difficult and include emotions
from real people. Here is a quote to think about: “Money makes the world go around, and if an
organization loses its financial resources, many of the other risks will naturally follow as a
result” (“What” par.13). The main fact is that the best trading systems will fail without proper
risk management (Russell par. 1). Most businesses will go down when they do not trade
properly.
Risk management is sometimes a process. According to an article, it allows someone to
examine and identify a risk, becoming easier then to avoid a risk (“What” par. 3). Avoiding risks
is very important to businesses. It is also a powerful tool, used in many organizations for years
(“What” par. 4). Powerful tools like risk management need a lot of attention so businesses
know what kind of risks they are taking. Loss control is a form of risk management. Knowing
when to cut losses is important (Russell par.3). Once one sets his or her losses, they should stick
to them (Russell par. 3). This is important, because if businesses do not set their losses, the
losses will be out of control and they could go out of business. Another important quote is:
“Unless businesspeople recognize trends and take action, they may find their business totally or
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partially destroyed” (Burrow 494). The businesspeople that recognize trends and take action
will have success and will have happy employees.
Risk management is also a big part of investing. Ted Miller states to invest more
aggressively for long-term years than short-term years so businesspeople can achieve their
long-term goals (Miller 331). I believe that long-term goals are more rewarding than short-term
goals because the long-term goals are more toward your future. On short-term goals, stick with
sure bets like CD’s (Miller 331). CD’s will help those who need the money within two or three
years. Miller also states to never take big risks with large sums of money (Miller 331). If
someone invests with a large sum of money and the stock market crashes, they will lose that
large sum of money and then some. The type of investments one makes dictates the kinds of
risks they take as well as their expected returns (Miller 331). Research has proven to only invest
when you have a solid foundation of money and insurance coverage (Miller 331). This is true,
because if the stock market crashes, there will still be money that they have saved back and can
use and will not be affected as badly as someone who has invested all of their money.
There is an emotional story that goes with risk management. There was a runner named
Terry Fox who woke up one morning and felt a lot of pain in his leg and went to the hospital
(“Into”). He learned he had cancer in his leg. To live, he needed his leg amputated (“Into”). He
decided to do ahead with the amputation. After the surgery, Terry decided to do something
special. He planned to run from the east to west coasts of Canada to raise money for Canadian
Cancer Research (“Into”). His friend trained with him by starting at one mile a day, which then,
over time, turned into eight miles a day (“Into”). After his training, it was the day of the event. It
started strong, but during his run, he ran into multiple problems. He and his friend took
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multiple risks, but, he did not finish (“Into”). He started to have chest problems. He went to the
hospital and learned he had cancer in his lungs. He died a short time later.
Now, there are facts, money tips, procedures, investments, and an emotional story that
people now know about. I hope now that people take what I have said and run a risk
management department of a business someday. If someone does not take a risk, what are
they waiting for?
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Works Cited
Burrow, James L. Business Principles and Management. Dubuque, IA: Thomson South-Western,
2008. Print.
“Into the Wind.” 30 for 30 ESPN. 28 Sept. 2010. Television.
Miller, Ted. Chapter 22: How to Have Investing Smarts All the Time: Ebscohost, 2003. Ebscohost.
Web. 21 Sept. 2010.
Russell, John. “Introduction to Forex Risk Management.” about.com. about.com. 2010 Web. 16
Sept. 2010.
“What is Risk Management?”Exforsys. 2010. Web. 16 Sept. 2010.