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Its the financial body armor of diversification, a cardinal rule of risking money to make money.
Big Gains Require Big Risks How Much Can You Handle?
Risk vs. reward is one of the foundational concepts of investing safe bets rarely deliver impressive returns.
I assess my own comfort level with risk, Garner said.
I dive into company financials, industry trends and analyst reports, she said.
For mutual funds and ETFs, I evaluate the experience and track record of the fund manager.
I scrutinize expense ratios and other fees, she said, as these can eat into returns over time.
For Garner, that includes just about anything thats overly complex.
If I cant understand it, I dont invest in it, she said.
If it sounds too good to be true, it probably is, she said.
I review my portfolio at least annually, or more often if market conditions change significantly, Garner said.
She also rebalances occasionally to see to it her investments stay within her desired proportions and percentages.
I adjustmy asset allocationperiodically to maintain my desired risk level, she said.
I strategically sell losing investments to offset gains and reduce tax liability, she said.
A major life event might necessitate a shift in strategy, Garner said.
As I get older, my comfort level with risk may change, Garner said.
That will require adjustments to my portfolio.
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