Diversifying your portfolio is a key strategy to tackle market volatility, which entails spreading your investment across various distinct markets or industries. You can mitigate risks by investing in multiple markets and sectors and compensate for losses in one by making gains in another.
Diversification takes on added significance in a volatile market, where even little fluctuations can greatly affect specific stocks or entire industries. For instance, if you have high exposure to technology stock/equities and the tech industry suddenly slumps, your portfolio could take a severe hit. Alternatively, if you have a varied portfolio, your losses may be mitigated by gains in other areas.
When diversifying your portfolio, paying attention to the economic calendar for the week is important. The economic calendar displays all financial events, including economic indicators affecting forex, commodities markets, and stocks. If you own stocks or other investments, it’s vital to watch out for important events and other developments that could affect the markets in which you’re engaged or invested.
