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How to capitalize on risk?
01:16 Mins Read
This video explores the ways in which you can use risk to your advantage.
Transcript
Risk is not something that you should avoid. In fact, for wealth creation, risk is a necessary trade-off that you need to make. To fulfill your future financial goals, it is essential to capitalize on risk. But then, how do you do it? There are plenty of different ways that you can use to capitalize on risk. Portfolio diversification is one of the most popular methods. It not only allows you to minimize risk, but also helps you capitalize on it. Investing in index mutual funds is another way to take advantage of risk. They offer adequate diversification and mimic the movement of the broad market indices. Hedging is also a widely used risk capitalization strategy. It involves using derivatives like futures and options to offset any potential losses that you may incur. Now that you know how to capitalize on risk, head on over to the next chapter to learn how to say yes to risk.