How can we manage and Minimise stock, Market Risks.
Isn't it obvious that once you understand the many sorts of risk involved in the stock market for both the investor and the stock you buy, you should also know how to manage that risk? After all, how a smart and successful investor manages risk is frequently what distinguishes him from the crowd.
Eager to know how?
Read on to understand the different ways in which an investor can both manage as well as minimise the stock market risk.
A varied portfolio is one of the greatest methods to combat stock market risks. Avoid picking companies from a single sector, industry, or business size when investing in stocks (like large-cap, small-cap, mid-cap).
The more you diversify your portfolio across multiple sectors or businesses, such as telecommunications, financial services, agriculture, and so on, the broader your portfolio gets and the smaller your risks become. By managing risk, a diverse portfolio also helps to combat market volatility.