How to manage your portfolio?
What are the Different Risks at the Stock-level?
The Rule No. 1 of Investing is, ‘Never lose money.’ And, the Rule No. 2 is, ‘Never forget rule No. 1.’ – Warren Buffett
Your Stocks portfolio can have 7 types of risks:
(A) At Stock-level: 1. Business Risk, 2. Valuation Risk and 3. Liquidity Risk
(B) At Portfolio-level: 1. Asset Allocation Risk, 2. Market Cap Risk, 3. Sector Exposure, and 4. Stock Exposure
Some risks help you earn good risk-adjusted returns, you need to manage them. Eliminate the rest!
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