Diversification of risks when investing in PAMM-accounts

Investing in PAMM-accounts is becoming increasingly popular. However, Choose the right PAMM platform for investing - is half the battle. The greater the profit, the greater the risks, so it is very important to diversify the risks by dividing your capital among the selected PAMM-accounts.

Don't strive for superprofits

Some investors have a rather frivolous attitude to investing, burning desire to maximize their profits every month, often taking unjustified risks, forgetting about the main rule of PAMM investing: it is good if you can get a small profit, and very good when you can earn a lot of money.

It is important to have patience and not to strive for superprofits. Usually, beginners, in the pursuit of profitability lose their money, and patient investors earn a lot of capital on their investments.

Forming a PAMM-portfolio correctly

As for PAMM investing, some investors believe that their total return is zero. However, it is important to understand that this depends primarily on the components of the investment portfolio, and a zero return is only the first step to a positive result.

In PAMM investing it is considered normal to have a monthly income of 30%. Of course, there are managers who show much higher returns. However, in almost all cases, this is associated with aggressive trading tactics. If you have a large number of such aggressive accounts in your portfolio, the risk of losing money will increase considerably.

To select PAMM accounts It is necessary to conduct a thorough analysis, distributing them not only on the average yield, but also on the riskiness. After the choice of PAMM-accounts to conduct the distribution of shares of your capital between them. The classic option is the presence of the PAMM portfolio of about nine accounts, of which 10% - aggressive, 90% - conservative.

Including aggressive PAMM accounts in your investment portfolio is not mandatory. If you are satisfied with your monthly profit, you can do perfectly well without them, without the risk of unnecessary loss of your funds.

With the practical experience of investing in PAMM accounts you can read in this article:
Investing in PAMM accounts in practice: creating a portfolio on 500$