The understanding that if one take higher risk, the greater is the return would be. Well that does not really hold true, it maybe totally the reverse the higher risk, the greater loss would be. Risk management would entail one to identifying and assessing (the downside) risk, crafting out strategies to manage such risk while maximising the returns (upside potential). Downside Risk By managing the downside risk, one would “prudently” manage the major adverse brings along with the investment. Invest with funds that you do not need in near term. Don’t buy from news, sell on rumours Diversify your portfolio, plan out riskier industries (Tech companies) Vs risk adverse (Consumer Staple companies). This would cushion against market volatility. Don’t put all your eggs in one basket. Arguably