We all know that stock market is volatile so investing in stock market includes risk, We can not avoid risk completely, but we can minimize the risk by following some simple steps.
Know your risk taking capacity:
Knowing your risk tolerance will help you to maintain balanced portfolio, many investor forget about risk tolerance in bull market and invest their market in high, If the market condition doesn’t favor their losses will be huge. If you risk appetite is low better to follow value Investing, If you risk appetite is high better to follow growth based Investing.
Always Review and Re-balance your portfolio Periodically:
Many Investors daily check their portfolio value, if it increasing or not, but they never thought about re-balancing, We can observer the Theme playing in stock market,so it is better to re-balance our portfolio according to trends/Theme playing in stock market, if any stock not performing as expected can reduce the allocation.
Invest some money in liquid assets like stocks/Golds:
To reduce risk many people invest all their money in assets like Mutual funds/ Bonds which are not highly liquid, But It is not a good practice, as It take lot of time to liquidate those assets, Better to keep some money in direct stocks/digital gold like gold bees, which we can liquidate in case of emergency.
Enough Diversify your profile:
When coming to diversification many people diversification in different stocks , but we have other options like investing in other country markets/Crypto and many more.
If you have any queries feel free to contact us.
Thanks and Regards