Risk management is a key component of successful investing from "summary" of The Concise Psychology of Money by Morgan Housel
When it comes to investing, understanding risk is paramount. It's not just about picking the right stocks or timing the market perfectly. It's also about protecting yourself from potential losses. This is where risk management comes in. Risk management is essentially about safeguarding your investments from unexpected events that could negatively impact your portfolio. It involves assessing the various risks associated with different investments and implementing strategies to mitigate those risks. One key aspect of risk management is diversification. By spreading your investments across different asset classes, industries, and geographies, you can reduce the impact of any one specific risk on your overall portfolio. Diversification helps to smooth out...
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