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Those seeking to make investments and better manage their portfolio must bear in mind the importance associated with diversifying their portfolio. While the market is presently booming and the chances of selling stock below the price that they were bought at may seem slim, the markets are subject to volatility and can react to anything at any given point in time. This highlights the need to maintain a well-diversified portfolio such that the chances of it being susceptible to risks are mitigated.

Read on and consider implementing the following suggestions to your portfolio.

Suggestion #1. Spread your wealth

While equities can prove to be most appealing, it is important to not place all of your money in one particular stock or sector. Moreover, stocks aren’t the only investments that you can invest in. exchange-traded funds and real estate investment trusts each serve as equally viable options. By not limiting yourself to a particular geographical region, you can better spread the risk you might incur thereby allowing you to potentially accrue greater returns.

That being said, it is important to maintain a portfolio that is relatively straightforward to manage. Rather than investing in 100 different vehicles that could prove to be financially draining and too time-consuming, consider limiting yourself to 20 or 30 investments.

Suggestion #2. Consider Bond or Index Funds

As an investor, you must also take into account the possibility of investing in index funds or fixed-income funds. By investing in tools that trace different indexes can allow you access to long-term diversification for your portfolio. The introduction of fixed income solutions can better protect investment portfolios against uncertainty and market volatility. Owing to the fact that these funds each seek to match their performance to broad indexes they aim to radiate the bond’s market value.

Such funds often have nominal fees associated with them which serve as an added bonus as it implies you have more money with you. Management and operating expenses are limited only due to what running these funds involves.

The only potential shortfall of index funds is the fact that they are passively managed. This can be suboptimal in the case of inefficient markets.

Suggestion #3. Continue to build your portfolio

It is important to add to each of your investments with regularity. Make use of rupee-cost averaging if you have INR 50,000 to invest. This approach can be used to help iron out the peaks and valleys generated by market volatility. The premise governing this strategy is to curtail investment risks by investing the same amount of money over a certain time frame. 

With the aid of rupee-cost averaging it is possible to invest money with regularity towards an outlined portfolio of securities. By employing this strategy you can buy more shares while their prices are low and less when their prices are high.

Suggestion #4. Always know when to exit your investments

While buying and holding in addition to rupee-cost averaging make for viable strategies they must only be employed so long as market conditions are conducive to the same. It is important to remain current with each of your investments and look out for changes in broader market conditions. Equally important is being aware of the goings-on in the companies you invest in. By following them you will be able to better anticipate when it is time to cut your losses, sell your shares and move towards another investment.

Suggestion #5. Be aware of commissions

If trading isn’t your forte, you should be aware of what fees you will be expected to pay. While some firms have a monthly fee in place others incorporate transactional fees. Each of these is capable of adding up and cutting into the profits you might otherwise accrue.

Always be aware of what you pay for and what you derive from each of these payments. It is important to understand that the least expensive option need not be the best option. Stay abreast of any changes made to the fees you incur.

At Angel One, investors and traders alike are made clear of the fee structures from the get-go and transparency prevails. To make smart investment decisions, consider using ARQ Prime which removes human bias in the process of recommending stocks to users. The stocks suggestedinclude value stocks, growth stocks, high momentum stocks and quality stocks.

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