There is a Strong relationship between volatility and market performance. When volatility increases, risk increases, and returns decreases. The risk is represented by the dispersion of returns around the mean.
Majority of the traders do not understand the risk of volatility. And they tend to overestimate their ability to beat the market. And as a result, they take on unnecessary risk.
Because of unnecessary risks they are unable to survive longer in the market. And to become successful investor/trader in the stock market the first thing you need is survival. Because success is not an overnight journey. For success, you have to spend your many years. You have to deal with so many bad trades and opportunities then you will find the best opportunity which helps you to make you successful in the market.
That’s why if you want to become successful you have to sustain longer. And for long-term sustainability, you have to maintain your risk and money management. Because risk is uncertain in this market.
As volatility can be affected by many factors of region or country economic. Such as taxes or interest rates policies. Like, if central banks set the short-term interest rates for overnight borrowings by the banks. If they change overnight rate then it becomes a reason to affect the stock market’s volatility.
That’s why if you don’t follow your risk management then this kind of sudden change will affect the market but more than market it will affect you too violently. It may cause to wipe you out from the market.
Another example of volatility is the stock market in 2008. As we all were witnessed the worse situation in 2008 crash. The time when big investors like Mr. Warren Buffett has lost his almost 50% portfolio. At that time we have seen huge volatility in every stock, indexes. But after this huge tragedy, he still sticks to the same strategy and maintains his stop loss.
Second recent eg. of USA’s election. In this election, George Soros played with 1 $ billion. But he fails because of the wrong assumption. Still, he is in the market, and 5% positive. This is the difference why 5% investors are successful after the huge volatilities and 95% retail investors lose their whole capital and wipe themselves out from the market.
By this, now, you understood why risk management and money management is important. Because if we allocate a maximum portion of your capital i.e. 70% in just one stock then it will take you to the huge risk.
So to get maximum awareness about the volatility of the market Nifty Millionaire has taken a footstep ahead. As Nifty millionaire has developed one platform which is called Nifty millionaire Tribe.
Where you can able to connect with professional trader directly also with the members from all over India and also out of India. On this platform, you can solve your existing portfolio’s positions along with that if you want any suggestion for a new opportunity then also professional traders will directly guide you.
Along with Nifty millionaire Tribe, the Nifty millionaire has developed one more platform – ProfitGyan. With the help of Profitgyan, you can able to diversify your risk. Such as this platform will guide you as per your capital that how much risk you can take as per your capital. Also as per your risk how much quantity you can take. Because as risk management is important for any successful opportunity, the same way allocation (money management) is also important.
So this is how Volatility is affecting you and your investing. If you have any more doubts or confusion regarding Volatility or Nifty Millionaire than you can contact our Heroic Investor Management Team.
Call on: 02230987899
*Professional investors/trader on niftymillionaire platform is Bindul shah. (Sebi Registered) Sebi Registration : INH000003663 (Bindul shah Sebi Registration : INH000003663)