Overcome extreme market volatility and maintain portfolio stability with these investment strategies
Market volatility is an omnipresent threat for investors. During such periods of unpredictable economic trends and fluctuating market performances, making the wrong investing moves can dent your financial prospects severely.
Following the profitability-based investment strategies
as advised by Rani Jarkas Cedrus Investments, investors can outperform market
downturns and maintain consistent portfolio stability to not only emerge faster
but better from the stages of volatility.
What is a volatile market and what
are its characteristics?
The rapid price swings and unpredictable market trends
signify its volatility. It is referred to as a quantification of the speed and
magnitude of price swings for assets. Grater market volatility means a must
faster and bigger price swings observed for assets. For an asset, a shift in
its market price denotes its volatility and thus can prove detrimental for investments.
Market volatility demands investment strategy
modification so as to accommodate essential measures of recovery and risk
mitigation in order to preserve the overall profitability and safety of a portfolio.
The key features of a volatile market are -
-
Volatility
cause deviations of expected returns on investments
-
Asset
values and process change frequently and unpredictably
-
The
magnitude of volatility depends in the level of asset price deviation
-
Volatility
is a measure of the dispersion of returns
-
Volatile
assets are very risky to invest in
-
The variance
of asset values in a market is a feature of volatility
Investment strategies to
overcome risks of volatile markets
Increase in volatility causes an increase in risks. Both
result in loss of investment performance and profitability. Making investment portfolios
vulnerable to severe losses, market volatility demands optimum patterns and strategies
of investing so as to make possible better and stable recovery and safety
against the same.
The best ways to safeguard investment profitability
and expected performance is to follow the following strategies as devised by
the financial
services executive Rani T Jarkas Hong Kong -
§ Practise hedging against market
volatility
Hedging against the possible losses from market volatility
is an effective strategy to maintain a profitable portfolio. One way to do so is
by buying protective put options which best protect against losses which enable
selling shares or assets at a pre-determined price as per the contract.
§ Prefer non-direction
investing
Without the need for markets to perform consistently in
a singular direction, non-directional investing is better suited to perform
during volatility and enabled an investor to take advantage of the market
inefficiencies so as to succeed during periods of downturns.
§ Avoiding market
volatility
One way to prevent portfolio disruptions and
investment losses is to ignore short-tern asset price deviations or swings. If
you maintain a diversified portfolio as suggested by Rani Jarkas Firm Cedrus Investments,
you are better positioned to play dormant during a volatile market.
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