How to Manage Your Investments: 6 Components of a Successful Strategy
Like many things in life, managing your own investments becomes more complex as you get older. For young professionals just starting out, it makes sense
Category: Managing Risk
Risk management is a key component of any investment strategy. It helps investors protect their assets by aiming to reduce market risk though diversification, allocation between stocks and bonds, and other financial planning measures. By managing risks effectively, investors can help protect their portfolio against diversifiable risks and increase the likelihood of achieving long-term goals.
The risk of loss is inherent in investing: market volatility, changes in economic conditions, and geopolitical events are always there. It’s not possible to protect against all types of investment risk, but proper risk management seeks to mitigate risks than can be managed, such as company-specific risk.
Diversification of investments across different asset classes, sectors, and geographies, portfolio rebalancing, and an ongoing discussion about investment risk profile are some ways we seek to minimize investment risk.