Five Proven Strategies To Lower Your Investment Risk

1. Buy Quality. In market downturns, dividend-paying blue chips hold up better than up-and-comers. Large caps do betetr than small caps, and value generally does better than growth.

If anything in your portfolio needs to go, look first at your small-cap stocks, unprofitable companies, and other more speculative issues.


2. Diversify Broadly. This has two advantages: First, it increases your chances of holding a big winner; and secondly, it leads to less volatility than holding just a handful of stocks.


3. Asset Allocate. Your asset allocation is your single most important investment decision.


4. Follow a position-sizing strategy.


5. Adopt a trailing-stop discipline.


NOTE: see separate entries for details on points 4 & 5.


* * * * *