It is very important to have a diversified portfolio to minimize risks and protect your investment. Diversification of investment in different investment tools shields you from market fluctuation and potential risks.
Investment in Stock Market
When investing in stock market, it is important to buy shares of different stocks from different sectors. Even the best stocks possess some risk and there is always a chance of loss. Apart from investing in high-risk high-gain shares, it is important to invest in some defensive stocks to protect your hard earned money from potential losses.
Investors must also invest some portion of their saving in government bonds and Bank Fixed Deposits to safeguard their investments as these tools possess very less to no risk. These investment tools also offer fixed income.
Portfolio management is all about managing investment so that the invested money grows with minimum risk. The best strategy to portfolio management would be to select the best performing sectors and then pick the best performing stocks within these sectors and then invest your money. Apart from stock market, people should also invest some portion of their saving in money market fund and in fixed income tools.
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