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RiskIntermediate8 min

Risk Management for Investors

Risk management is about designing a portfolio you can hold through volatility, not avoiding risk entirely.

Identify Risk Sources

Equity brings market and valuation risk, debt brings duration and credit risk, and hybrid blends both.

Knowing the source of risk improves allocation decisions.

Build Risk Controls

Use allocation caps by category, maintain emergency liquidity, and avoid theme concentration.

Document rebalancing triggers before volatility appears.

Behavior Rules Matter

Panic selling can do more damage than temporary market declines.

Written policy rules improve discipline when sentiment changes rapidly.

Key Takeaways

  • Good risk management increases staying power.
  • Allocation design is the main control lever.
  • Behavior rules prevent avoidable mistakes.