Determine Your Risk Tolerance
Each individual has a risk tolerance that should not be ignored. Any good stock broker or financial planner knows this, and they should make an effort to help you determine what your risk tolerance.
Then they should work with you to find investments that do not exceed your risk tolerance.Determine the risk tolerance involves several different things. First you must know how much money you have to invest, and what your investment and financial goals.For example, if you plan to retire in ten years,and you've not saved a single penny achieve this goal,you must have a high risk appetite. because you will have to do some aggressive risky to invest in order to achieve your financial goals.On the other side of the coin, if you're in your early twenties and you want to start investing for your retirement, your risk tolerance is low.
You can afford to watch your money grow slowly over time.Realize that your need for a high risk tolerance or your need for a low risk tolerance really has no bearing on how you feel about risk. Again, there is much to determine your tolerance.For example, if you invested in the stock market and you watched the movement of that stock daily and saw that it was dropping slightly.
If you have a low tolerance for risk, you would want to sell if you have a high tolerance, you would let your money ride and see what happens. This is not based on what your financial goals are. This tolerance is based on how you feel about your money.
A good financial planner or stock broker to help determine the level of risk you are comfortable with, and help you choose your investments accordingly.
Your risk tolerance should be based on what your financial goals are and how you feel about the possibility of losing your money.
