Key factors to keep in mind whenever you invest
Have clear objectives
It’s important to keep in mind why you are investing in the first place. Is it for retirement? How much do you need to live on during retirement? Are you investing for a short-term goal, like buying a house?
Having a clear goal in mind and revisiting those goals often will help you figure out the best investing strategy for you. It will also keep things in perspective when you’re feeling overwhelmed with the volatility of the market.
Understand your risk tolerance
Depending on your age, income, and goals, you may want to have a riskier portfolio. Or maybe you want to err on the side of caution and have a conservative portfolio.
Either way, it’s important to know how much risk you want to take. All investments are risky, and some are riskier than others.
If you have a longer time frame, then you can probably afford to take some more risks. If you’re going to need your money soon though, then it probably makes more sense to invest in something with more stable returns, like fixed-income investments such as bonds.
Have broad diversification
Having a diverse portfolio is another way to protect your portfolio against volatility. For example, you can purchase Insurance, Bonds, Invest in PF or mutual funds that have holdings in a variety of different companies across different sectors.