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In this tutorial, Clay Preston explains how to use shading and highlighting in Word. He begins by selecting a color, opting for yellow. He demonstrates how to shade text, which covers the entire line, by using the bucket tool. To highlight a specific word without affecting the entire line, he advises using the paintbrush tool. After choosing the desired color—again, yellow—he emphasizes that highlighting only affects the selected word. He concludes by encouraging viewers to like the video and subscribe for more content.