Sector and Geographic Diversification

Sector and Geographic Diversification

Diversifying across different sectors and geographies can protect investors from sector-specific or region-specific downturns. 장마 관련주

For example, while the tech sector might be suffering due to regulatory changes, consumer goods might be thriving due to rising consumer confidence.

Setting Stop-Loss Orders

A stop-loss order is an order placed with a broker to buy or sell a security when it reaches a certain price. It is designed to limit an investor’s loss on a security position.

How Stop-Loss Orders Work

If a stock’s price falls to the stop price, the stop-loss order becomes a market order, and the stock is sold at the next available price. This can help investors prevent significant losses, especially in volatile markets.

The Importance of Properly Setting Stop-Loss Levels

Setting stop-loss orders too tight might lead to a sale during a minor market fluctuation, while setting them too wide may result in substantial losses. Finding the right balance is key to effective risk management.