Every investor takes risks, come to think of it risk is everywhere around us. Some risks are exaggerated to which we over react and some risks are underplayed which makes us blind to those risks. After 9/11 attacks many people were afraid to fly and used the car to travel resulting in huge spike in road accident deaths across U.S (Flying remains the safest mode of transport barring walking I guess). Even in markets such blind spots to risk always exist. There was extreme risk blindness when the markets were way high at 21000 and expectation of 25000 points was seen as certain by experts and media. When markets hit a low around 8000 points the expectation was reset to a low 6000 by the same experts and media! At an index level of 8000 the markets were by any definition not very high. But the risk pendulum had swung from extreme risk blindness to extreme risk aversion. When the markets were actually risky at 21000 they were seen as not risky at all but when it was at 8000 points it was seen as risky. An alien visiting from outer space would have been very confused at our notions of risk and risk aversion.

QED: Taking calculated risk while investing ( knowing what can go wrong and how it will affect my investments ), following an asset allocation plan, rebalancing the portfolio, using extreme optimism to sell and extreme pessimism to buy remains the best method to overcoming risks.