Exposure Offers Clarity in the Risky World of Investing

Last week, a conversation with a friend reminded me how easily we can confuse actual risk with our own exposure to that risk. My friend travels a lot for work, and I asked him where he planned to go this year. His answer surprised me. “I don’t know,” he replied. “With everything going on in the world, I’m not sure I want to travel as much.”

Based on the headlines, it’s tempting to think the world is falling apart. Who wouldn’t think it’s safer to just stay home, go to work and deal with our everyday lives? But there’s a problem with this supposed logic, and I’m guilty of it, too.

I traveled to Australia twice last year. One of those times, I happened to eat in the chocolate cafe at the center of last month’s hostage crisis. When I heard the news, I started playing the “what if” game. Something similar happened when I heard about the attacks in Paris. I’d been in Paris last year, too … what if?

Read the rest of the article on The New York Times.