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Safe Passage

You must remember this: Preparing for the stock market's risks helps you come out ahead.

This story appears in the July 1997 issue of Entrepreneur. Subscribe »

Investing successfully in today's financial markets may seem as perilous as getting out of Casablanca. If your papers are not in order, you could be in for a rough time--not from the authorities but from the swings of stocks. But don't let the bad guys get to you. There are plenty of steps you can take to assure safe passage.

When it comes to investing, risk counts as much as reward. Stocks generally have provided long-term gains, but the financial markets are still prone to slip-ups, corrections or even meltdowns. Past performance, as any astute investor can tell you, is no guarantee of future returns, and salvaging a ravaged portfolio is a lot harder than protecting one. If you're stretching to make all you can from your portfolio, you could end up with a nasty shock . . . at least in the short run. The key is to become "risk-ready," especially when the financial markets start to rock and roll.

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