Risk Management Strategy

In Investing as per me, a risk can never be cent percent eliminated, but only be mitigated to the maximum extend possible, there lies our success!

Listed below are the major risk mitigation strategies which we can adopt as a part of Risk Management while investing.

(1) For any trade don't risk more than 5% of your total capital.

(2) Maintain a clear cut exit plan for the trade you do.

(3) Large profit expectation implies larger risk, so be minimal in return expectations so that you limit down sides.

(4) Don't be a trader as I alway say, margin calls can bust up your hard earned money, be a long term patient seasoned "investor".

(5) Liquidate your underperforming assets & stay long with performing ones, don't worry about the losses you book, since your performing assets will cover your losses & fetch you decent profits, rather than sinking along with the ship!

(6) Do your homework well before you invest, don't just invest for sake of it, take longer time to study all the aspects of the stock/ investment you are entering into. Be 100% confident.

(7) Do not time the market, we will not be able to snatch all the market peaks, so be realistic & a patient investor.

(8) Do not take positions or investment burdens which your income cannot support. Also very importantly don't invest with leverage (don't borrow money for investing).

(9) Have a contingency plan, if some of your investment strategy fails to meet a goal, have back up plan to support the situation so that you don't fall short of money for your goal.