Risk management: What you need to know to minimise your losses and boost your potential profits

Investing on the stock market is risky. But it's the risk that makes people invest. Without taking on risk, there's no chance of a potential reward.

So what can you do to minimise the risks you take on?

There are some easy-to-apply techniques to follow that can lower your chance of losses. And they can boost the potential profits you can make from your investments too.

Read on to find out what you need to know…

The crucial aspects of risk management when you invest

There’s no sure thing on the stock market. There are great opportunities out there to make money. But there’s also the risk of losing money if you don’t get your share picks right.

So what can you do about it?

You need to employ good risk management techniques as part of your investment strategy.

By applying good risk management, your portfolio will benefit. You just need to have some discipline too.

Four risk management techniques you must include in your investment strategy

Here are four risk management techniques to help you limit your downside and boost your potential profits…

Use stop losses to limit your potential losses
Trailing stop losses protect you against the downside and also give you the perfect exit strategy
Discipline: A vital part of investing success and vital to lowering your risk
Position sizing helps keep your emotions at bay

For more on what you need to know about risk management, check out our vital report here.

And don’t forget, if you have any questions that you want answered about risk management, you can ask our in-house experts here.


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Tags: risk management, how to manage investment risk, investment strategy, how to reduce investment risk, risk management techniques