How does the SEBI SCORES platform assist in Risk management?

The SEBI SCORES platform is an online platform by the Securities and Exchange Board of India (SEBI) for investors to make complaints against listed companies, registered intermediaries and market infrastructure institutions. It is an important risk mitigation mechanism to provide a formal grievance redressal mechanism. By facilitating the timely and efficient resolution of investor complaints, SCORES contributes to the transparency and accountability of the Indian securities market.

Is it better to invest long-term or short-term?

For most investors, it would be recommended to invest in the long-term, not to act in the short-term. Long-term investing has the advantage of compounding, mitigates the effects of short-term volatility and often has lower transaction costs and more favourable tax treatment of capital gains. Short-term investments tend to be associated with higher risk, require active management and can be emotionally draining.

How often should I rebalance my portfolio?

Portfolio rebalancing should be done periodically (usually twice a year) to ensure the alignment between your asset allocation, investment goals and risk tolerance. Rebalancing is an action to adjust the portfolio back to its target asset allocation.

Is it possible to eradicate the risk in the stock market?

No, it is not possible to eliminate the risk in the stock market. Every investment has some inherent risk involved. However, there are various strategies, like diversification and stop-loss orders, that can be adopted to reduce and manage these risks to an extent.

What allocation should I have for stocks or bonds?

The best combination of stocks and bonds will depend on your age, risk tolerance and investment horizon. A common rule of thumb is the 100 minus age rule, which involves subtracting your age from 100 to get an idea of what percentage of your portfolio your investments should be in equities, with the remainder going to safer investments like bonds. For example, if one assumes they are 30 years old, this formula would mean 70% investments in equities and 30% in bonds.

Risk Management in Stock Market

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Risk Management in Stock Market

Stocks

Risk Management in Stock Market

Investing in the stock market can be a powerful way to build wealth, but it's often considered a high-risk endeavour. While it's true that market fluctuations can result in losses, many of these risks can be reduced by adopting some easy-to-implement and disciplined practices.