Risk management is the key to long-term survival. Without it, even the best strategies can collapse.
**Principles of risk management**
– Avoid concentration in one stock.
– Match portfolio to risk tolerance.
– Set maximum exposure per arista networks stock.
– Stop-loss orders: automatic sell triggers.
**Examples of diversification**
– Technology: Apple, Microsoft, Google.
– Healthcare: Pfizer, Johnson & Johnson, Roche.
– Consumer goods: Coca-Cola, Nestlé, Procter & Gamble.
– Energy: ExxonMobil, Chevron, BP.
**Psychological aspects**
– Patience is vital.
– Stay rational in bull markets.
– Review regularly.
**Conclusion**
Risk management is the difference between success and failure. By diversifying, allocating wisely, and setting rules, investors protect wealth.
