#1 Item new investors Neglect when Analyzing Deals

[Bryan Reid]

With all the focus I see on calculating investment returns, something I consistently see missing in the analysis is: RISK.

There are two sides to consider when analyzing any investment: Risk and Return.

As a community, we do a good job (and BP's tools help here) at predicting our potential returns.  But very rarely do I see these analyses tempered by any effort to quantify the risk side of the equation.

I like to perform a simplified risk analysis as described in linked article, as well as running multiple return analyses with progressively bleaker assumptions.

But I'd be very curious to hear what others think/do, too - how do you consider risk?

Am I being overly cautious in my approach?