Risk Management - Risk management is the process of identifying, assessing, and mitigating potential risks that could affect an individual or an organization. It's a crucial aspect of decision-making across various domains, including finance, business, healthcare, and more. Risk can be managed by properly diversifying the portfolio across different asset classes.

Key Components of Risk Management:

• Risk Identification: This involves recognizing and understanding potential risks that could impact objectives. Risks can stem from various sources such as financial uncertainty, market fluctuations, technological changes, natural disasters, or even human error.
  
• Risk Assessment: Once identified, risks are evaluated based on their likelihood of occurrence and the potential impact they might have. This step helps prioritize risks based on their significance and prepares for adequate responses.
  
• Risk Mitigation or Treatment: Strategies are implemented to either eliminate or reduce the impact of identified risks. This could involve risk avoidance (eliminating the risk altogether), risk reduction (implementing measures to lessen the impact), risk transfer (shifting the risk to another party, e.g., through insurance), or risk acceptance (acknowledging and budgeting for the risk).
  
• Monitoring and Review: Risk management is an ongoing process. Continuous monitoring of risks, reassessment of strategies, and adapting to new risks are vital. Regular reviews ensure that risk management strategies remain effective and aligned with the evolving landscape.