Tuesday, 13 July 2010

How to protect your serenity against the negative bias of daily news (Part 4 of 6)


Businessmen know that no one is exempt from occasional mistakes. This is why civil liability insurance exists. Entrepreneurs who wish to limit their risks only need to purchase an insurance policy. If the worst happens, their financial losses will be limited.

A rational approach to dealing with threats calls for reducing the risk of catastrophic losses. For instance, if you live in an area with elevated risk of floods, you will be well advised to buy insurance against damages caused by water. Could you use the same strategy to protect your peace of mind against gloomy forecasts aired by the media?

When commentators predict a stock market crash, you can protect yourself by converting some of your investments to cash. Can you purchase other assets, such as gold, whose performance tends to be inverse to the price of shares? In order to stop worrying about catastrophes, you need to set a cap on potential losses.

[3] Transform problems into action: Anxiety and fear feed on uncertainty more than on any other factor. The feeling of not knowing what to do can unsettle your routines and lead you to make mistakes. Indecision causes physical tiredness and prevents a good sleep at night. The solution is not to ignore risks, but to transform them into specific actions.

To be continued in Part 5

[Text: http://johnvespasian.blogspot.com]

[Image by Reinante El Pintor de Fuego under Creative Commons Attribution License. See the license terms under http://creativecommons.org/licenses/by/3.0/us]

How to protect your serenity against the negative bias of daily news (Part 4 of 6)


Businessmen know that no one is exempt from occasional mistakes. This is why civil liability insurance exists. Entrepreneurs who wish to limit their risks only need to purchase an insurance policy. If the worst happens, their financial losses will be limited.

A rational approach to dealing with threats calls for reducing the risk of catastrophic losses. For instance, if you live in an area with elevated risk of floods, you will be well advised to buy insurance against damages caused by water. Could you use the same strategy to protect your peace of mind against gloomy forecasts aired by the media?

When commentators predict a stock market crash, you can protect yourself by converting some of your investments to cash. Can you purchase other assets, such as gold, whose performance tends to be inverse to the price of shares? In order to stop worrying about catastrophes, you need to set a cap on potential losses.

[3] Transform problems into action: Anxiety and fear feed on uncertainty more than on any other factor. The feeling of not knowing what to do can unsettle your routines and lead you to make mistakes. Indecision causes physical tiredness and prevents a good sleep at night. The solution is not to ignore risks, but to transform them into specific actions.

To be continued in Part 5

[Text: http://johnvespasian.blogspot.com]

[Image by Reinante El Pintor de Fuego under Creative Commons Attribution License. See the license terms under http://creativecommons.org/licenses/by/3.0/us]