Stock Market Info – Here is One Must Know Stock Market Tip

Looking for stock market info? In this article I am going to give you one must know stock market tip and this is to reduce risk and diversify.

In this article I am going to give you all the stock market info you will need to be able to do this. Whenever you invest in anything you are exposing yourself to risk as investors it is our job to protect ourselves as much as possible from this risk. There are two basic kinds of risk they are.

· Systematic risk – this is risk affects everything or things you cannot protect yourself from, examples are things such as political upheaval in your country.

· Unsystematic risk – this is risk that only affects certain assets. You can protect yourself from this risk by diversifying.

Next we have what is called the risk reward tradeoff. Basically this means deciding how much risk you are willing to take on versus how high you want your returns to be. The more risk there is the higher the returns will be and vice versa less risk equals less returns.

The best way to reduce risk is by diversifying. All this means is that mix your portfolio between different investment vehicles so that you are protected from risk. If one vehicle does poorly it will not affect your portfolio because your risk is spread out between your various investment vehicles. Here are some things to keep in mind when diversifying.

· Spread your portfolio between different investments such as cash, real estate, stocks, bonds and mutual funds.

· Choose securities with various levels of risk. You don’t have to always pick investments that are safe, it helps to pick investments with varying rates of return so that large profits will offset big losses.

· Spread your securities amongst different industries, don’t put all your eggs in one basket – don’t invest everything in one industry.

I hope you found this stock market info useful. If you want to discover the REAL