The Circle of Influence… and Beyond?

I have heard on many occasions, people comforting others when an unfortunate event occurs: “It was beyond your control.” Or, “there is nothing you could have done about it.” Well, fair enough, factors one cannot influence should not be on their minds as they go about their day-to-day business. If people worried about every single thing on this planet, no one would find peace and happiness.

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“Worry about the things you can control, not on the things you cannot” – this does have some truth about it. I, however, do not believe that it is complete. One should not ignore the things they cannot control. They need to eliminate their exposure to it as best as they can. They need to focus on the things they can control and eliminate risk on the things they cannot. By doing this, by working as hard as they can on the things they can control, they would be increasing their odds of success and not risk the possibility of having it undone by external factors.

Being in the Foreign Exchange field, I have seen first hand how exchange rate movements could undo a company’s profit margins and hard work. I have even witnessed companies do business at a loss due to the unfavorable exchange rates they end up achieving. They would conclude a deal promising them a hefty return of around 32%, only to find that their actual return months later is 8% – eroding most of their returns to unfavorable exchange rate movements.

Mitigate risk to your business in the factors you cannot control. No one knows where exchange rates will be in the future; no one knows what major global events will occur causing significant financial shifts. Do companies need to focus their energies on foreseeing these global events? Do they need to put their business at the mercy of what the macro economic variables end up doing? I believe the answer is no. In foreign exchange, and for life in general in fact, “focus on the things that you can influence and take risk on it, but mitigate risk as much as possible on the things you cannot.”

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