How to protect your portfolio from a market crash?

Volatility in the stock market is common, but sometimes a big market crash can be scary for investors. If you prepare properly, you can protect your portfolio from loss. Here are some key strategies to protect your portfolio from the market crash.

• Don’t invest in just one sector or stock. Invest in different asset classes, such as stocks, bonds, gold, real estate, and Bank FDs.
• Reduce risk by investing in different countries and industries. For Example, if the IT sector falls, FMCG or healthcare stocks can handle your portfolio.
• If the share price falls to your decided level (Stop-Loss Price), it will be sold automatically. This can prevent big losses.
• Good stocks become cheaper during a market crash. If you have kept some money safe (Cash or Liquid Funds), you can buy shares at a discount.
• Gold and government bonds remain safe during the market crash. By investing in these, you can balance your portfolio.
• Market crash is temporary, but good companies bounce back in the long run. Avoid panic selling with a “buy and hold” strategy.
• Avoid fear and greed. Do not panic, selling without research. Invest regularly through a SIP (Systematic Investment Plan).