the essential point in running a risk is that the returns justify it.

Risk must be evaluated not by the fear it generates in you or the probability of your success, but by the value of the goal.

Here's the essence of risk management: Risk no more than you can afford to lose, and also risk enough so that a win is meaningful. If there is no such amount, don't play.

Before we can determine a rational basis for making asset-allocation decisions, certain principles must be kept firmly in mind. We’ve covered some of them implicitly in earlier chapters, but treating them explicitly here should prove very helpful. The key principles are: 1. History shows that risk and return are related.
2. The risk of investing in common stocks and bonds depends on the length of time the investments are held. The longer an investor’s holding period, the lower the likely variation in the asset’s return.
3. Dollar-cost averaging can be a useful, though controversial, technique to reduce the risk of stock and bond investment.
4. Rebalancing can reduce risk and, in some circumstances, increase investment returns.
5. You must distinguish between your attitude toward and your capacity for risk. The risks you can afford to take depend on your total financial situation, including the types and sources of your income exclusive of investment income.

The end must justify the means.

Most people view risk taking primarily as a way to make money. Bearing higher risk generally produces higher returns...But it can’t always work that way, or else risk investments wouldn't be risky. And when risk bearing doesn't work, it really doesn't work, and people are reminded what risk's all about.

The ability to take a calculated risk energizes me.

Most people view risk taking primarily as a way to make money. Bearing higher risk generally produces higher returns...But it can’t always work that way, or else risky investments wouldn't be risky. And when risk bearing doesn't work, it really doesn't work, and people are reminded what risk's all about.

Risk is what you make of it.

What you risk reveals what you value. (p.91)

Risks, I like to say, always pay off. You learn what to do, or what not to do.

The real payoff of asset allocation comes when you figure out the right mix of how much of your money you keep safe and how much you’re willing to risk to get greater rewards and have the potential to grow faster.

"Why risk?" I responded. "It should be, why not to risk?"

The end may justify the means as long as there is something that justifies the end.