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Ten Ways to Reduce Investment Risk

 

Risk Management Strategies That Help Investors Increase Probability of Having Cash When They Need It

 

1. Set investment goals and review them periodically.
2. Diversify your portfolio to temper the effect of market swings.
3. Do your homework before buying a stock or bond.
4. Avoid concentrating on stocks or bonds of one industry or sector.
5. Develop a sell discipline.
6. Understand that bonds provide certainty, not long-term security.
7. Match bond maturities to your future cash needs.
8. Diversify bond purchases and stagger maturities to cut interest rate, prepayment and reinvestment risks.
9. Track political and currency risks that can affect your foreign investments.
10. Rebalance your portfolio regularly.