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10 Tips for Managing Risk in Portfolio

Every portfolio is organized in some or the other way. It can be planned or changed with the changing environment and needs. The following suggestions may help add structure to your portfolio and provide clarity on how a portfolio can be organized and managed.

What is portfolio risk?
What is portfolio risk?

When we talk about investment, it never comes without any risk. So we need to face risk in this investment path too. When you diversify your investments, you are taking and mitigating investment risks, commonly called portfolio risks. The risk could be lowered by building a strategy to invest in any asset. Below are the different portfolio risks you can check for a better understanding.

Types of Portfolio Risks 
Types of Portfolio Risk 

The following risks are the ones that are involved with your investment plans. 

  • Market Risk: Everything depends upon how the market is functioning. So far, it is the top risk any portfolio could encounter. This market risk is also called systematic risk. This risk is based on the market and its volatility feature. The market can always go down or up depending on the financial environment.  
  • Liquidity Risk: This risk is when you cannot sell your investment because of low market value. This can raise a big problem when you need cash for some emergency. 
  • Concentration Risk: The risk of losing all the money in one asset because you have invested them in a single sector, such as investing all the money in stocks. 
  • Credit Risk: This is only applicable for debt investment, as it occurs when the company that has issued the bond faces financial difficulties. 
  • Reinvestment Risk: This risk occurs when you invest in a specific bond at a particular rate and gain high returns. But a falling interest rate can gain high interest. 
  • Horizon Risk: When you are investing in a single asset for a longer run, you are required to sell all your investment at a meager price in the market. This could cause a high loss. 

All these above-mentioned risks result in significant losses. These risks consist of different domains, but eventually, they harm your investments only. So take all your steps with a broader outlook. If you are facing any of the risks listed above, you should definitely try the tips listed below.

If you need some ideas about what to read next, here they are:
10 Tips for managing risk 
10 Tips for managing risk 

The below-mentioned tips are to help you in managing all your risks. 

1. Adjust timing

Time is another factor in managing the risk, and the retirement timeline differs from the portfolio risk. As we know, interest rates are the biggest threat in economic society, so adjusting the timing could be bound in your favor. 

2. Consider Hedged equity

These are mutual funds that minimize the effect of volatility. Managing funds is a challenging task as holding on to the stocks that lean to natural volatility. This task is not so easy, but it could be brought into action. 

3. Put options

There are several ways to conduct a particular approach. The most common is to purchase put options, which are best on the underlying stock’s price falling. This option gives you the liability of selling a specific stock at a particular price in the coming future. 

4. Stop loss

It orders to protect investors from falling stock prices. There are various types of stops available. Considering a hard stop means that selling a stock at a fixed price that cannot change will protect you from heavy losses. And can also help you in managing the stocks. 

5. Dividends

The worst way to protect your stock portfolio is to pay dividends on your stocks. Dividends have historically accounted for a sizable portion of a stock’s total return. It may represent the entire amount of the investment in some cases.

6. Principle protects notes

Principal-protected notes with equity participation rights may appeal to investors concerned about the preservation of their principal. They are fixed-income securities that, like bonds, will return your initial investment if you hold them until maturity.

7. Modern Portfolio Theory (MPT)

It is an investment term that refers to the process of constructing a portfolio. The idea behind seeking high returns with a minimized risk that can be resolved. And investing in non-correlated assets can help to mitigate this risk. 

8. Looking at alternatives 

Trying a different way of looking at things can also help you invest money. Having an alternative for every sector could help your investment growth. Dividing all your investment into different domains could help you get going. 

9. Controlling emotional thinking

Investment is never related to emotions, so there should be no playing with emotions in the matter of investment. This could lead you to a heaping amount of losses. Emotions can control your investments, too, so going with the right emotion can fetch you more controlled emotions and a thinking process. 

10. Liquidity  

They are the additional ones, as these investment plans provide a volatile nature to each and every asset. The stock market, for example, evolves over time. Having something in cash that could be replaced with another asset could help you. 

This has been a ride from talking about several risks and coming up with a bunch of tips to carry on with them as a solution to your problems. So, try to keep checking where you are investing and at which rate. And yes, if all this investment-related stuff gives you a headache, let someone take over your headache. You can check the portfolio risk using the https://calculator.secvolt.com/ link. This could provide you with detailed insights, which would help you manage the risk. Understand that your investment is directly proportional to risk. Risks are scary, but you need to take risks if this could lead you to a better investment and better life. 

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Ashish Verma

Ashish Verma is the founder and CTO of Secvolt, with close to 10 years of experience in the IT industry. He has been the technical backbone of the company and has worked tirelessly to make the technical infrastructure robust. He is a passionate entrepreneur who generates solutions that have the potential to bring change.

In order to ease the client’s interaction with Secvolt, he has strived to develop the business’s technological foundation and establish a user-friendly platform. Ashish has also contributed substantially to smoothening the company’s administration and ensuring that there are no lacunae in the broad structure of the organization. 

Early Years

Coming from a middle-class family, he was aware of the problems that people faced while using technology. He sought to create something that was simple to use yet had a powerful effect. As he studied computer science, he became eager to offer a solution to real issues. He began his professional career at Amdocs, where he gained expertise in client management while catering to more than 20 clients. Later, he moved to Citicorp, where he had exposure to the investment industry. His time at Amdocs and Citi enabled him to produce high-standard, efficient, and scalable technical infrastructure.

He left corporate jobs for his startup because he was passionate about working on the concept of a smart city platform. He expanded the concept internationally and even collaborated with Global Dignity-Kuwait. Things didn’t work out for him the first time. He states, “My failures didn’t stop me from experimenting and trying new things.” He rose from the ashes like a phoenix and founded FewerClicks, an End to End IT solution company.

He worked on the creation of Solster Finance, a decentralized financial platform based on the Solana blockchain. He created this platform single-handedly which has helped the team raise a $1M investment and a revenue of more than $5M within 6 months of launching. 

He has previously worked on many blockchain technologies and cryptocurrency ventures, which include Decentralized Finance Applications (Defi), Decentralized Applications (Dapps), File Contracts (SIA, record-keeper), Smart Contracts (rust, solidity), and NFT Development. His experience and effective communication have helped many team members understand Secvolt effectively and the underlying technology it is powered by.

He possesses the ideal combination of strategic thinking and excellent business insight. He is responsible for formulating technical aspects of the company’s strategy to guarantee alignment with business objectives. With his drive to experiment with new technologies, he has helped Secvolt achieve a competitive edge. Being in charge, Ashish never holds back in encouraging the different departments to make profitable use of technology, helping to grow as an unstoppable team at Secvolt!

Hanif Shaikh

Hanif Shaikh is the founder and CMO of Secvolt, with over 8 years of experience in the industry. He plays a crucial role when it comes to the growth of Secvolt. Since the beginning, he has acted as a mentor for each and every employee of the company, and he makes an effort to be accessible to his staff anytime they need him. 

Hanif first entered the Blockchain and Crypto world in 2016, and nothing has stopped him since. He views blockchain as a transparent platform that provides authority and accountability back to the people. He consistently believes that “overcommunication is better than miscommunication.” He has lived by this motto with his staff, clients, and networks.

Early Years

Hailing from Gujrat, a state in India, he is following his dream to contribute to making this world a better place. In the process, he has struggled, made some mistakes, and learned lessons from those mistakes to achieve success in life. His entrepreneurial attitude dates back to his childhood when he learned from his father’s business and aspired to have it all. He came from a humble background and had ambitions to succeed in life.

He has developed two successful businesses from scratch, and in the process, he has inspired young people to start their own businesses. He was an integral part of the Quora Mumbai Meetups and helped it become a great success in a short period of time. Later, he began organizing meetups to raise awareness about blockchain, cryptocurrencies, and their applications. He also shared his knowledge of ICOs, highlighted reputable ICOs, and established a small cryptocurrency community on WhatsApp groups.

He chose to go on a Blockchain Tour in India in 2019 and met some fascinating people. Throughout his journey, he has been able to build an extensive and robust network that has aided Secvolt’s growth. Because of his expertise and understanding of the Crypto Industry, he has been featured on several news channels and has advised the youth on the subject.

He is in charge of the company’s marketing operations and is responsible for developing its marketing strategy and vision. He oversees a group of passionate marketing professionals and plans promotional strategies with the goal of making  Secvolt a global brand. 

He is a perfect blend of a practical attitude and innovative business acumen. He believes in the ability of individuals to perform exceptionally well when given an environment to experiment and explore their passions; a culture that he has built at Secvolt.

Divakar Choudhary

Divakar Choudhary is the founder and CEO of Secvolt who has been trading for more than six years now. He started the business in 2018 with the conviction that if anybody could dominate the market, it was him. He poured all of himself into the business and turned Secvolt into a market-beating machine.

Divakar developed the fundamental quant models that perform risk management and capture alpha using his skills from the previous organization and his time spent in the market. In order to make the system effective, he backtested risk mitigation algorithms and worked on them for more than 4 years to produce results.

Early Years

He began his crypto journey in 2013 after getting his first gaming Laptop and melded in with the Blockchain community like sunbeams on the ocean. He created many YouTube channels at the age of 15 and businesses by the time he was 17. Technology has always piqued Divakar’s interest. He endeavored and succeeded at freelancing in his effort to achieve financial independence. However, he soon realized that freelancing would always keep him in the rat race, and the only way out would be to build a machine yielding generational wealth.

Soon, he started trading using his own capital but suffered a loss in the market. He says, “95% of people lose money & the rest 5% make money from the loss of those 95%.” He then began working on an effective technique to be included in this 5% after losing part of his own assets during the early stages of trading. He began evaluating quant strategies using statistical models.

With his methodology, he once produced a 20% ROI in a single month. With the zeal of creating something exceptional, he borrowed money from friends and family and generated decent returns for them using primitive quant models. Month after month, the system’s efficiency and the competence of the man behind it allowed for excellent market returns.

In the beginning, Divakar worked on his laptop for over 18 hours. It took every ounce of his energy as he executed about 530+ deals daily for 4 years to create this company from the ground up. In 2021, he increased his volume by 827%, trading a total of $52 million and hitting a single account.

In his words-

“What does becoming “THAT” GUY mean to you? Who did you need when you were young? Be that person!”

He is a perfect example of someone who followed his passion and made a fortune from it! He dreamt of creating generational wealth as a youngster, envisioned it as an adult, and is now making it a reality with Secvolt!