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So before investing your hard earned green, catch a good vibe for the variance and the mean.

– The Speculation Blues

D

o you speak riskese? Citizens of Japan speak Japanese, lawyers speak legalese, and leading investment advisors, casino statisticians and insurance actuaries speak “Riskese.� Riskese is the essential language of investing and is used to discuss topics of risk, return, statistical significance and time. Returns and risk go hand in hand. You cannot expect high returns without taking risk. People are perfectly comfortable talking about the returns portion of the investment process, but how squeamish do they get when they realize they will lose money on their investments? After the decline of 2008, people are far more aware of this possibility, but they are still looking for that perfect investment with small risk and big returns. People are also still looking for a weight loss pill that will allow them to continue eating country fried steak, massive cinnamon buns and ice cream on a regular basis. Neither exists.

Problems Lack Of Understanding One of the primary deterrents to investors earning market rates of returns is their lack of understanding of the relationship between risk and return. The natural tendency of investors is to want returns without the risk. Because risk is the source of

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