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An Introduction to Risk Management by John Richard Still

A chief concern for all businesses, particularly in times of political and economic uncertainty, is how to evaluate and mitigate risk. This process, commonly referred to as risk management, seeks to identify when an investment or position poses a potential loss to the organization and subsequently prescribes a plan to address the issue according to the firm’s risk tolerance and investment objectives. While this may seem like a straightforward task, manifold variables influence each decision. Here are a few tips to guide the decision-making process:

Know the Stakes: Those responsible for risk management should know the risk/reward ratio involved before making any decision. Mitigating risk can be costly, so accurate assessment of how much it will cost to hedge each position is critical. To that end, it is also important that enough resources be committed to the risk management process, as the costs of unmitigated risk can be exponentially greater than preemptive measures.

Constantly Reassess: The value of assets, current economic climate, and other variables are constantly in flux, which necessitates ongoing evaluations. Several programs have been developed that can streamline this process, but it is essential that mangers take the initiative to address concerns as they arise.

Be Ready for Risk: The people in charge of risk management are readily aware of its importance, but other departments within the organization must adopt a similar mentality. Policies and procedures should guide the decision-making process through all levels.

About the Author: John Richard Still brings two decades of industry experience to his position as the President of the Still Financial Group in Nacogdoches, Texas. Specializing in long-term wealth products, Mr. Still and his team offer a vast assortment of life insurance policies, retirement savings plans, and employee benefits. Additionally, John Richard Still proffers consulting services to businesses on all types of long-term care products.

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