Risk must be managed carefully to protect investment capital from "summary" of The Little Book of Behavioral Investing by James Montier
Investing in the financial markets is inherently risky. The future is uncertain, and there are countless variables that can influence the value of an investment. As a result, it is crucial to manage risk carefully in order to protect your investment capital. One way to manage risk is through diversification. By spreading your investments across different asset classes, industries, and geographies, you can reduce the impact of any one investment performing poorly. Diversification helps to smooth out the highs and lows of individual investments, providing a more stable overall return. Another way to manage risk is through position sizing. This involves determining...
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