Outlook Money
Volatility can be a gauge for the market performance or returns on investments throughout the investing journey. The volatility tries to tell how much the daily returns vary.
1. Diversifying Portfolio; Diversification allows investors to absorb risks as each type of investment comes with different risks.
It is advised that one must do a self-assessment to know risk appetite. Although only a person can understand how much risk, he/she can take but taking help can further suggest which instruments should be used depending on risk-taking ability.
This simply is the behavior that relates to “people who trade more than necessary. While there are many successful traders who earn good profits, there are also those who overtrade and lose money.
Re-balancing the portfolio is as important as asset allocation. It helps re-assess the funds one needs and increases or decreases the allocation in a particular asset class based on age, risk-taking capacity, and whether it is the time to invest or exit the market.