Ray Dalio says you can diversify away roughly 80% of any investment's risk while keeping the upside. His method: identify an investment, strip away avoidable risk, and hold the remaining 20% that still offers returns.
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I was with Ray Dalio a few months ago and he talked about this. He said, with pretty much any investment, you can diversify away about 80% of the risk. So he goes, what I like to do is find an investment. I de-risk it as much as I can, but I still keep— and he says 80% of the risk without losing your upside. Because you can do that with most investments. At least the investments I get into, that's what Ray Dalio was telling us. And if you don't know, Ray Dalio is one of the greatest fund managers of all time, largest hedge fund ever. She talks about how you can diversify away 80% of your risk. So this is a process, again, a framework for you doing this. So right now, if you can, I'd spend some time looking through your potential deals and seeing how you can de-risk them before you go to step 2 and frame those deals out.