Risk and Uncertainty for the Christian Business Owner

Risk management is changing substantially. Henry Hu, the found and inaugural director of the Securities and Exchange Commissions’ Division of Risk, Strategy and Financial Innovation is now suggesting that businesses are having to manage risk and uncertainty. He differentiates between the two as follows:

“I think one of the biggest risks right now … is what happens when the Fed eventually moves away from its extraordinary quantitative easing. The economy has basically been on steroids for a number of years. The amount of intervention by the Fed has affected all asset prices, bonds and stocks. It has caused large distortions. I don’t think anybody could quite put a handle on what will happen when this all ends. This brings to mind the classic distinction between risk and uncertainty. With risk you can assign probabilities to different things happening. With uncertainty, you can’t even assign probabilities. We’re really talking about uncertainty.”

Hu goes on to say this:

“In the wake of the government shutdown and the debate over the debt ceiling increase, can you actually assume now that the Treasury has no credit risk? Absolutely not. A lot of anchors have given way.”

The normal reaction to risk and uncertainty is to do what one thinks is necessary to secure one’s future. For the Christian Business Owner, this means running a more conservative shop – perhaps not expanding as aggressively as planned. It means building cash for the future. It means getting out of debt. And it means getting ready for the storm. All of this is good and necessary. But it is not enough.

Only by relying on Christ can one face the future with peace, confidence and hope. Christian Business owners don’t transfer our trust in the Lord to our risk-mitigation efforts. Instead, we understand that our hope for a secure future is in the Lord and in Him alone. One of the greatest promises that Christ gave us was when He said “In this world you will have trouble – but take heart, I have overcome the world!”

No matter what risks your facing today, be sure to place your full faith and trust in the Lord. He has overcome the world and its’ troubles. While you might have a rocky ride right now, your future can be certain and filled with hope.

Bill English, CEO
Mindsharp

 

image_pdf