Answer:
You can reduce your investment risk by weeding out stocks with high P/E ratios, unstable management ,and inconsistent earnings and sales growth. Diversify your investment portfolio across investment product types and economic sectors. Diversification reduces your overall risk by spreading it over a variety of products.
Step-by-step explanation:
Here are five better ways to manage investment risk.
- The solution to pollution is dilution. Investors should take a cue from environmental experts. ...
- Avoid low quality or longer-term bonds. ...
- Keep asset allocation constant. ...
- Buy into bad markets. ...
- Steer clear of actively managed mutual funds.
Have a good day and stay safe!