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Arno Heens
27 mrt. 2021
#lossminimizing #nolosses
An overall dip in the market is something we all know about. We have probably all experienced one. With a market crash often comes large losses which none of us look forward to(I assume). Even though losses are almost inevitable, a well chosen portfolio can aim to reduce the magnitude the crash will have on your assets.
Have a well diversified portfolio.
If you take a quick look at market indexes you will notice that the overall trend is that the price goes up. Even though dips are there they are almost unoticable due to the relative size the dip is to the growth. Especially the Dow Jones Industrial Average in recent years. The reason behind this is that if you have one security in your portfolio and the investment is very unfortunate then your entire portfolio will collapse. However, if that one security is mixed with other ones which don't get affected by the market crash then overall your portfolio won't completely collapse. Especially if you add in investments which thrive during market crashes to offset the other worse perfoming investments. Which leads to the second tip which is:
Short the market