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Definition of 'Robust'

In finance, the term "robust" is used to describe an investment strategy or portfolio that is able to withstand market volatility and adverse economic conditions. A robust investment strategy is typically one that is diversified across asset classes and does not rely on any single asset or investment style. This diversification helps to protect the portfolio from losses in any one area and can help to improve its long-term performance.

In addition to diversification, a robust investment strategy should also be based on sound investment principles. These principles include asset allocation, risk management, and dollar-cost averaging. Asset allocation refers to the process of allocating your investments across different asset classes, such as stocks, bonds, and cash. This helps to balance risk and return and can help to improve the overall performance of your portfolio. Risk management is the process of identifying and managing the risks associated with your investments. This includes risks such as market risk, interest rate risk, and inflation risk. Dollar-cost averaging is the process of investing a fixed amount of money into your portfolio on a regular basis. This helps to smooth out the effects of market volatility and can help you to build your portfolio over time.

A robust investment strategy can help you to achieve your financial goals, such as retirement savings or college funding. By following these principles, you can create a portfolio that is well-diversified and managed, and that is able to withstand market volatility.

In addition to the above, there are a few other things to keep in mind when creating a robust investment strategy. First, it is important to have a long-term investment horizon. This will allow you to ride out market volatility and weather any storms that may come your way. Second, it is important to be realistic about your risk tolerance. This will help you to choose investments that are appropriate for your level of risk. Third, it is important to stay informed about the markets and your investments. This will help you to make informed decisions and to adjust your strategy as needed.

By following these tips, you can create a robust investment strategy that will help you to achieve your financial goals.

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