What are some effective risk management strategies in investing?

What are some effective risk management strategies in investing?

Effective risk management strategies include diversification, asset allocation, and setting stop-loss orders.

Can you explain how diversification works?

Diversification involves spreading investments across various assets to reduce exposure to any single asset's risk.

What is asset allocation and why is it important?

Asset allocation is the process of dividing investments among different asset categories, which helps balance risk and reward.

How can I set stop-loss orders?

You can set stop-loss orders through your brokerage account by specifying a price at which your asset will be sold automatically.