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Allison Schrager

How to Manage the Biggest Risk of All: Uncertainty

Technology and big data have allowed us to minimize risk in our lives, but nasty surprises like pandemics and war show us that flexibility is the real key.

You can’t plan for what you don’t see coming.

You can’t plan for what you don’t see coming.

Photographer: Scott Olson/Getty Images 

These are uncertain times, but we’ve never lived with less risk. That may sound crazy coming out of a pandemic that disrupted our lives in uncountable ways — and now we may be on the brink of World War III. But there is a big difference between risk and uncertainty, and each requires different coping strategies.  Risk can be managed with insurance or hedging; Uncertainty demands flexibility.

That's important to know when making big life decisions like buying a house, changing jobs, having a baby, retiring or even adjusting your portfolio.