If an investor has succeeded in collecting stocks in large quantities/values then he needs to immediately diversify, that is, not only investing in one type of stock or shares from the issuer, so investors need to divide their shares into several investment instruments or portfolios such as mutual funds and bonds. So if the stock issuer goes bankrupt, they still have other investment reserves.
So basically every investor must carry out diversification and allocation as a process which means as a strategy the funds will be distributed to several types of investment instruments such as property, shares, bonds, deposits, savings etc. The main goal of diversification is to create a balance in all investment instruments owned by an investor. The higher the expected level of profit, the higher the level of risk that must be borne and vice versa.
Risk Tolerance and Risk Profile
Risk tolerance is the minimum risk limit and the maximum level of risk that an investor must take, so it is closely related to the risk profile such as conservative, moderate or aggressive.
So basically every investor must carry out diversification and allocation as a process which means as a strategy the funds will be distributed to several types of investment instruments such as property, shares, bonds, deposits, savings etc. The main goal of diversification is to create a balance in all investment instruments owned by an investor. The higher the expected level of profit, the higher the level of risk that must be borne and vice versa.
Risk Tolerance and Risk Profile
Risk tolerance is the minimum risk limit and the maximum level of risk that an investor must take, so it is closely related to the risk profile such as conservative, moderate or aggressive.
