What are some effective strategies for protecting my investments?

What are some effective strategies for protecting my investments?

There are several strategies you can use to protect your investments, such as diversification, using stop-loss orders, and investing in low-volatility assets.

Can you explain how diversification works?

Diversification involves spreading your investments across various asset classes or sectors to reduce risk. If one investment performs poorly, others may perform well, balancing your overall portfolio.

What are stop-loss orders and how do they help?

A stop-loss order is a type of order that automatically sells a security when it reaches a certain price. This helps limit potential losses by exiting a position before it declines further.

Are there specific low-volatility assets you recommend?

Yes, low-volatility assets often include utility stocks, consumer staples, and certain bonds. These tend to be more stable during market fluctuations.

How often should I review my investment strategy?

It's advisable to review your investment strategy at least annually or whenever there are significant changes in your financial situation or market conditions.