Risks and rewards are inherently interdependent with each other, where risk tolerance tends to influence or even dictate rewards. An investor whose goal is to maintain their current assets instead of growing them will only keep safe and secure investments in the portfolio. Portfolio diversification: Portfolio diversification is necessary to minimize risks and maximize returns in the long term. However, it is preferable to diversify your portfolio; care must be taken to avoid excessive diversification. The diversified portfolio helped smooth out peak and valley effects caused by normal market fluctuations and survive long-term market downturns. Excessive diversification can become counterproductive and should therefore be avoided. Avoid Gambling: As an investor, one should avoid portfolios that rely on high-risk, high-return investments. This is because; Higher speculative investment may lead to conditions where the investor may be forced to sell their holdings prematurely at a loss due to a liquidity crisis and the expected returns will not materialize. Portfolio Management