The biggest risk in the financial world is lack of knowledge. What is risky to some people is boring to others. And just because someone describes something as risky – or safe  for that matter – doesn’t mean you can take that at face value. Safe and risky are subjective terms that need personal evaluation based on goals, situation, timeframe, reference point, knowledge, experience, etc. A second mortgage investment or a covered call option might be the best strategy for someone’s portfolio and might be considered conservative safe investments given the right situations. However, what does the rest of the picture look like and what other influences need to be considered before making that sort of decision?

How do you know? Always start your questions with yourself. What do you know about the transaction? Why do you want it? What are your expectations? What is influencing your decision? What do you need to know? And, how and when will you get out?