You determine Risk Tolerance
Posted By George on September 21, 2009
Each individual has a risk tolerance that should not be ignored. Any good stock broker or financial planner knows this, and they must make the effort to help you determine what your risk tolerance is. Then, they must work with you to find investments that do not exceed your risk tolerance.
Determining a risk tolerance involves several things. First, you need to know how much money you have to invest, and what your investment and financial goals are.
For example, if you plan to retire in ten years, and you do not save one penny of that, you must have a high risk tolerance – because you will need to do some aggressive – risky – investing in order to achieve your financial goals.
On the other side of the coin, if you are in the early twenties and you want to start investing for retirement, the risk tolerance will be low. You are able to watch your money grow slowly over time.
4. You know the level of risk. If you can not take a big risk, investment and short-term swing trading is notfor you. Better to invest in mutual funds or trust that will provide a stable payment and lower your risk risk.If high or medium risk taker, you can try to invest in stocks, and growth funds fence.
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