Investing Risk-Management Tools - dummies

By Paul Mladjenovic

Part of Precious Metals Investing For Dummies Cheat Sheet

Risk is necessary for investment success and knowing how to manage risk when investing precious metals is something that you can profit from. Try these proven strategies when investing:

  • Buy the dips. If you bought what you think is a great stock and its price drops, if possible buy some more. If your research and logic tell you it’s still a solid investment, buy some more. Ultimately time will pass and the odds are good that will rise, and you’ll profit from having bought more.

  • Keep cash on the sidelines. Have some money sitting somewhere safe, liquid, and earning interest waiting for an opportunity. If you have a chunk of cash you’re reading to invest, don’t plunge it in all at once. Invest half now and stagger the rest in over a few weeks or a few months.

  • Utilize stop-loss orders. The most commonly used tool for keeping your portfolio’s value intact is the stop-loss order.

  • Utilize put options. Put options are a great way to protect your investment during corrections or bear markets.