Determine your risk tolerance - modkostumwork.com
Every individual has a risk tolerance that should not be ignored. Any good stockbroker or financial planner knows this and should go out of their way to help you determine what your risk tolerance is. They should then work with you to find investments that do not exceed your risk tolerance.
There are many different factors that determine risk tolerance.
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| investment and financial |
First, you need to know how much money you need to invest and what your investment and financial goals are.
For example, if you plan to retire in ten years and haven’t saved a penny toward that goal, you need to tolerate great risk—because you’ll need to do some aggressive-risk-investing to reach your financial goals .
On the other side of the coin, if you are in your early 20s and want to start investing for retirement, your risk tolerance will be low. You can afford to watch your money grow slowly over time.
Of course, know that whether you have high risk tolerance or low risk tolerance really has no bearing on how you feel about risk. Again, there is a lot to determine your tolerance.
For example, what would you do if you invested in the stock market and watched the stock move every day and see it drop slightly?
Would you sell yourself or give up your money? If you have a low risk tolerance, you will want to sell… If you have a high tolerance, you will drop your money and see what happens. This is not based on your financial goals. This tolerance depends on how you feel about your money!
Again, a good financial planner or stockbroker should help you determine the level of risk you are comfortable with and help you choose your investments accordingly.
Your risk tolerance should be based on your financial goals and how you feel about the possibility of losing money. Everything is connected.
Source: modkostumwork.com
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