What is Your Personal Risk Tolerance?

Risk Tolerance

Risk Tolerance is the degree of uncertainty you are willing to take on to achieve potentially greater rewards is determined by a combination of factors, including your investment goals and experience, how much time you have to invest, your other financial resources and your fear factor.  Risk tolerance is an important component in investing.  With our strategy worksheet we can help you see what type of risk in investment returns you are most comfortable with.

Where do you rate in Risk Tolerance...
  • What kinds of investments might keep you awake at night?

  • Are you more concerned about losing money or losing purchasing power?

  • How worried do you think you would be in a severe market decline? 

  • How much money are you willing to lose?

  • How varied do you want your portfolio to be?

Managing Investment Risk

Diversification:  A well balanced investment portfolio involves spreading investment funds among different types of assets and investing in different securities within each type of asset.  This reduces risk, because even though one or more investments might falter, others will gain.

Dollar-Cost Averaging:  Making the most of investments over time one way is to commit to investing a certain dollar amount on a regular basis.  Consistently investing is call dollar-cost averaging.  Investing a specific amount of money at a regular time interval regardless of what the market is doing often will do well over the long term.

Investing Over Time:  Investing over the long term reduces investment risk because the investment will usually gain back any losses over the long term.  Long term goals are usually 10, 15 or 20 years or longer.