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Understanding Risk in the Market for Optimal Investments

As they say, change is the only constant. Be it social norms, cultural trends, weather, or market conditions, it all keeps on changing. The investor faces market risk when the market value of a financial product falls. It falls due to factors that affect the entire market and are not limited to a specific economic commodity.
However, the term ‘market risk’ is broad and has many different types, depending on the situation and financial product. To summarise, there are four kinds of risks- equity price risk, interest rate risk, commodity price risk, and foreign exchange risk. You can read about them in the following section.

Types of Market Risks

Types of Market Risks –

  • Equity Price Risk – If interest rates suddenly rise or fall, we can observe a rise in market volatility. Stock prices, more than other asset classes, can be highly volatile. A security’s price can change quickly, causing it to lose value. It is known as equity price risk. It is of two types- systematic risk and unsystematic risk. The first is an industry-wide risk, whereas the second is a company-specific risk.
  • Interest Rate Risk – How sensitive a bond’s price is to interest rate changes & fluctuations is what makes the potential for a loss in the investments. If the interest rate increases, then the losses in the debt instrument are more likely to incur. It is what constitutes interest rate risk.
  • Exchange Rate Risk – It is also known as the currency or foreign exchange risk, the risk associated with currency price fluctuations. Depending on the direction of the change, purchasing foreign assets becomes less or more expensive.
  • Commodity Price Risk – Crude oil, gold, and corn prices can fluctuate dramatically due to political, regulatory, or seasonal changes. It is known as commodity price risk. Commodity price fluctuations may impact traders, investors, consumers, and producers.

Now that we know what market risks are, what do we do next? We reduce them. Let’s go over the two main methods for calculating market risks.

Risk Calculation Methods

Risk Calculation Methods –


Value-at-risk is a statistical method for determining the extent of the risk (potential loss) & the likelihood that the loss will occur over a given time (occurrence ratio).

Beta compares a stock’s volatility to that of the market, as a whole, based on previous performances. In other words, it determines whether stocks follow the market.

Market risks should be understood and mitigated as soon as possible to get the most out of your investments. In the next section, let’s discuss how to deal with them.

If you need some ideas about what to read next, here they are:
Ways to Handle Market Risks

Ways to Handle Market Risks:


Here, we will discuss five specific methods for dealing with the market risks:

  • Diversify to minimize concentration risk – Once we have determined the optimal asset class combination for our portfolio, we can reduce overall investment risk by diversifying our investments within the same asset class. It implies that if we invest in equity mutual funds, we should diversify by investing in large, middle, and small-cap equity mutual funds. When the market crashes, small-cap company prices fall faster than large-cap company prices. As a result, by diversifying our portfolio, we will lower our overall investment risk.
  • Think long-term – You can manage volatility by taking a long-term and systematic approach. When you are a short-term trader in the market, volatility hits you hard. Equities tend to level off over time, according to historical data. A systematic or phased approach also helps to even out volatility.
  • Know Your Risk Tolerance – Risk tolerance is determined mainly by the investor’s age and current financial obligations. It refers to an investor’s ability to bear the risk of losing their invested capital.
  • Maintain Sufficient Liquidity in Your Portfolio – One way to maintain sufficient liquidity in your portfolio is to set aside an emergency fund equal to 6 to 8 months’ expenses. We should have low-risk investment options like liquid and overnight funds in our accounts to ensure easy access to emergency funds.
  • Monitor Your Portfolio Regularly – If you are a long-term investor, you do not invest and then forget about your portfolio. You must monitor the performance of your portfolio regularly and conduct periodic reviews. You should review your portfolio every six months because some asset classes, such as equities, are prone to short-term volatility. As a long-term investor, you should pay less heed to the short-term and only make changes when your investments show poor performance over an extended period.

The bottom line is that you must exercise caution in maintaining and expanding your portfolio. Furthermore, working with an experienced firm like Secvolt is always a plus because they make your job easier.

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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!