Never Risk What You Can't Afford to Lose

Risk is an inherent part of investing. Generally, investors must take greater risks to achieve greater returns. Those who do not tolerate risk very well have a relatively smaller chance of making high earnings than do those with a higher tolerance for risk. But one thing should be kept in mind that one should not risk the money which he can’t afford to lose.

i. Always have an adequate emergency fund of at least 3-6 months.

ii. Do not invest in anything you don’t understand.

iii. Diversify your investments among asset classes, strategies, and timelines.