Role of Leaders/Managers in Crisis Management
A sequence of sudden, unplanned and unexpected events leading to instability in the organization and major unrest amongst the individuals is called as crisis. Crisis generally arises on a short notice and causes major disturbances at the workplace. Leaders and managers play an extremely important role during crisis. One should lead from the front. Show […]
Mistakes to Avoid in Risk Management
The field of risk management has undergone a sea of change in the past few decades. At one point in time, risk management decisions were based on individual expertise and gut feeling. However, now the decisions are based on sophisticated mathematical models. From relying on human intuition to moving on to embrace artificial intelligence, the […]
Why the Flood Insurance Market should be Privatized?
In the United States, the government of the United States is the biggest player in the flood insurance industry. This has been the case ever since the National Flood Insurance Program (NFIP) was created in 1968. Prior to 1968, many private insurance companies refused to provide private insurance to homeowners who had houses in flood-prone […]
The Perils of Leaders and Their Personality Cults in Times of Authoritarian Rulers
The Worldwide Rise of Strongmen and the Dangers of Personality Cults World over, there is the rise of strongmen and authoritarian leaders. Starting with President Trump of the United States, and including President Putin of Russia, as well as India’s Prime Minister, Narendra Modi, and extending to Brazil and Philippines, there is no dearth of […]
Threats to Organization Culture
What do you understand by Organization culture? Organization culture reflects the working conditions, behaviour of employees, their thought processes, beliefs and so on. Organization culture in a layman’s language is often called as work culture and plays an essential role in extracting the best out of employees. Work culture needs to be healthy for employees […]
In stock market there is strong relationship between risk and return. Greater the risk, greater the return generally! In financial terminology risk management is the process of identifying and assessing the risk and then developing strategies to manage and minimize the same while maximizing the returns.
Every investment demands a certain amount of risk and for an investor to assume this risk he has to be compensated duly. This compensation is in the form of something called as the risk premium or simply the premium. Risk is therefore central to stock markets or investing because without risk there can be no gains. Successful investors use stock market risk management strategies to minimize the risk and maximize the gain.
In financial markets there are generally two types of risk; first the Market Risk and second the Inflation Risk.
The inflation risk is an important consideration in long term investments where as the market risk is more relevant in the short term. It is the market risk that can be managed and controlled to a certain extent, inflation risk cannot be controlled.
There are certain strategies that can be employed to mitigate the risk in a stock market. The strategies are as follows:
Ask Warren Buffet, the greatest investor of all time, what is your advice to investors and he says ‘don’t lose money!’ But stock market connotes risk and fortunately there are enough strategies for a wise investor to safeguard his money and ensure gain. A careful and timely exercise of these options helps you see of the risk involved.
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