How to balance risk and return in investment?

It is important to consider diversification because it is a key to managing the risk that is involved in investment portfolio. This could be done by spreading investment across different kinds of asset classes, industries and regions because it is going to help investors to mitigate the risk involved due to market fluctuation . Diversification would help you to reduce the overall risk that is in a portfolio.

Start investing in low risk assets as well as high risk assets to balance your investment risks. You can invest in bonds for low risk and stock market for high risks.

This is however an informed decision as far as the investment is concerned. For instance the diversification of the investment portfolios is indeed a very great move as the balance and return on investments can reach a balance at a point.

First of all, you need to know your risk appetite so that you can decide what types of investment you want to make. Diversification is important. We all know that one should not put all eggs in one basket.