In today’s unpredictable financial markets, risk management has become an essential skill for every investor. The first step is identifying potential risks — from market downturns and currency fluctuations to geopolitical events. Once risks are recognized, you can use strategies like diversification, hedging, and stop-loss orders to minimize potential losses. Professional advisors often recommend a balanced mix of assets, ensuring that underperformance in one area can be offset by gains in another. Equally important is maintaining liquidity — keeping a portion of your portfolio in easily accessible cash or cash equivalents. Effective risk management doesn’t mean avoiding risk altogether; rather, it means taking calculated risks that align with your investment goals and risk tolerance.