The investor's guide to reducing risk

Whether you invest in one asset or in a mix of assets, risk is inevitable. You may not be able to eliminate risk altogether. But you can certainly reduce the risk in your portfolio. Here are three tried and tested strategies that can help. Firstly, ensure that you diversify your investments. Investing too heavily in one asset or asset class can increase the portfolio risk. Secondly, monitor your investments regularly. Changes in the prices of the assets could increase the overall portfolio risk. So, ensure that you evaluate your investments periodically to keep the risk at a tolerable level. And lastly, do not invest more than you can afford to lose. This helps safeguard your funds to a large extent. Interested in learning more about risk and risk management? That’s just what the next module in Smart Money deals with. Check it out.