Risk Minimisation of portfolio........

Taking in to account the past market conditions, each and every individual who was dealing with stock market was very worried . Investor might have invested his savings in the stock market either directly or indirectly.His objective was to minimise his own portfolio risk. Now the qusetions come that " how an individual could minimise his own portfolio risk.
Diversification is the way by which you can minimise your portfolio risk. Investors portfolio has to be diversified. Rather than investing his entire savings in a single company, he must invest small small amounts in different different sectors. One can not predict/forecast future market conditions. So in case rate of return is not as good as you would have wished it may be compensated by heavy profits in some different sector. Your loss can not be compensated untill and unless you have diversified your portfolio. So one must put in his money in different sectors such as IT Sector, Telecom Sector, Pharma Sector , Real Estate Sector etc in order to minimise the portfolio risk.
In case you are investing indirestly in the stock market such as insurance sector, here again one must be acting as aFund Manager. Rather than putting in entire money in one fund say Equity Fund, one must ensure proper debt equity ratio. Taking in to consideration good market conditons no doubt you may put your bulk savings in Equity fund but at the same time must ensure certain savings in debt fund just to secure your money.in this case your ratio may be 85:15 . As soon market conditions get worst you must understand the neccesity of Switching. Switching is just transfering of your money from one fund to another. in this case you must switch from equity fund to debt fund immideately so that your 85% money do not get affected by those adverse market conditions. IIn this case your debt -equity ratio may be 10:90.Again as soon market gets better switch again i.e from debt fund to equity by ensuring some proper debt - equity ratio.Debt funds comprises of many funds such as Protector, preserver etc. Similarly Equity fund comprises of Multiplier, Rich, Balancer, Flexi Growth, etc.Different funda are associated with different NAV which fluctuate in the stock market on daily basis. Again by seeing fund performance of various funds you can mamange your own portfolio and hense can minimise the risk by the way of switching at right time.Thus we can say the way to minimize the portfolio risk is to diversify the portfolio.