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Chapter 2 — HOW DOES RISK HELP YOUR PORTFOLIO?
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HOW DOES RISK HELP YOUR PORTFOLIO?

HOW DOES RISK HELP YOUR PORTFOLIO?


Tap below to watch a short video about taking investment risks, and read on for more details.

Learn more about systematic risk, unsystematic risk, and why you should leverage risk in your investment planning.


The main takeaway: there is a reward for bearing risk!

For many investments, the more risk there is associated with that security, the greater the possible return. 

There are risky strategies that cut into the potential gains of your portfolio but they can also protect your assets if the market declines significantly. We will cover this in later chapters.


“It is only by being bold that you get anywhere. If you are a risk-taker, then the art is to protect the downside.”  - Richard Branson



So, don’t be afraid of risk! There is always some degree of risk present in every investment you make. At the same time, by avoiding or minimizing specific types of risk, you can keep temporary hiccups in the economy or financial markets from decreasing your portfolio value.

 

Alex's thoughts: 
In order to make a decent profit I take on risk but not so much that I can't get a sound night's sleep.

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