Determine your risk tolerance

Each individual has a risk tolerance that should not be ignored. A good stockbroker or financial planner will know this and will work to help you determine your risk tolerance. They should then work with you to find investments that do not exceed your risk tolerance.

Determining your risk tolerance involves several different things. 

financial goals

First, you need to know how much money you need to invest and your financial and investment goals.

For example, if you plan to retire in 10 years and haven't saved a dime toward that goal, you need a high risk tolerance. Because achieving that goal requires aggressive, high-risk investments. your financial goals.

On the other hand, if you are in your early 20s and want to start investing for retirement, your risk tolerance will be lower. You can afford to watch your money grow slowly over time.

Of course, keep in mind that whether you need a high or low risk tolerance has nothing to do with how you feel about risk. Again, there are many factors that go into determining what is acceptable.

For example, what would you do if you invested in the stock market and watched the stock movements every day and discovered that the stock price is going down slightly?

Do you sell or keep your money? If you have a low risk tolerance, you may want to sell it. If you have a high tolerance, you can deposit your money and see what happens. This is not based on your financial goals. This generosity is based on how you feel about your money.

Again, a good financial planner or stockbroker should be able to help you determine the level of risk you are willing to tolerate and choose your investments accordingly.

Your risk tolerance should be based on your financial goals and how you feel about losing money. It's all together.

Source: bambang77irawan.blogspot.com

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