How can I manage risk when investing in the stock market?

How can I manage risk when investing in the stock market?

Investing in the stock market always involves some level of risk, but there are several strategies you can use to manage risk and protect your portfolio. Here are a few tips:
Diversify your portfolio: Spread your investments across a variety of stocks, sectors, and asset classes to reduce the impact of any one investment on your overall portfolio.
Use stop-loss orders: Consider placing stop-loss orders on your stocks to automatically sell if the price falls below a certain level. This can help limit your losses and protect your capital.
Have a long-term perspective: Avoid making short-term trades based on market volatility or news headlines. Instead, focus on long-term trends and fundamentals to avoid reacting emotionally to short-term fluctuations.
Invest in quality companies: Look for companies with strong financials, a history of consistent earnings growth, and a competitive advantage within their industry. These companies are more likely to weather market downturns and continue to grow over the long term.
Monitor your portfolio regularly: Keep an eye on your portfolio and make adjustments as needed based on changing market conditions or your own investment goals.