The purposeofriskmanagementistoprevent the risk, the timelydiscovery of risk, predict the risk of possibleeffects, andmanaged toget theadverse effects of controlata minimum.
These would include: an investor cannot pick the return but can only choose the level of risk, One cannot accurately predict the market, Diversification lowers risk, Invest to be on the Efficient Frontier and low cost investments can improve performance vs. high costs.