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A well-diversified portfolio not just saves you from risky market conditions, but also gives you an upper hand in steadily increasing your wealth. You should start by calculating your risk tolerance. It mostly depends on your personal life choices, for example, the amount of time you can give to trading activities in a day, what is your goal, how fast you want to achieve that particular goal, etc. Then, determine your short-term and long-term goals. Money invested for short-term goals should be invested differently than funds reserved for long-term goals. The longer your time-frame, the more risks you can afford to take with your investments.

Invest in different sectors

Investment in a single sector would make your funds more risk sensitive. Spread the risk as much as possible. Invest in different type of stocks and commodities. Also, why stick to a single market?  Lastly, invest in products which you have knowledge and can easily be managed without external help.

Opt for investments with varying risks

The main goal of diversifying is to minimise the risks but this does not mean that you only invest in blue-chip stocks. A good methodology to use here is to look at stocks of foreign companies. Stocks from other countries tend to perform a little differently and typically balance out a domestic-heavy investment portfolio nicely. You can also look at smallcap or midcap stocks.

Add to your funds on a regular basis

Fixing a time slot for adding more to your investment not only help you organise your day-to-day budget but would also help you keep track of your invested money, rate of returns you are getting and how close are you from your original goal. Adding funds in a regular interval instead of lump-sum helps you average out the cost of per unit purchased by taking into account when you bought shares when the market was low and when the market was high.

Don’t get carried away

Market would not always be in a bullish state. Sooner or later, it will fall. So, you need to have apt knowledge about the market and to achieve that, you need to constantly study about the intricacies of trading and exchange ideas with those who are active traders.