Managing financial risk
Risk and return, an emergency fund, the time horizon, concentration.
A higher expected return is usually linked to higher risk. A promise of high income “with no risk” is a warning sign.
A common recommendation is to keep an emergency fund covering 3–6 months of expenses, so as not to sell investments at a bad moment.
Money needed soon is risky to keep in volatile assets. Concentration risk is when a large part of capital sits in one asset.