Understanding yourself – your needs, wants, emotional urges, etc. – can be one of the most effective ways to start your investing journey. After all, it was Aristotle who said, “Knowing yourself is the beginning of all wisdom.”
Understanding your risk tolerance
The key to building a diversified portfolio that meets your financial needs is to understand your risk tolerance. This means how much risk you are able to handle as an investor to meet your goals.
Why does risk tolerance matter?
Having a true understanding of your risk tolerance will allow a financial professional to develop the most accurate portfolio of assets – whether it includes equities, bonds and/or other investment options – to help you build wealth, save for retirement or other financial goals. As a reminder, all investments involve some degree of risk, some more than others.
To identify your individual risk tolerance, I would discuss the following factors with you:
- Your age
- Investment objectives and timeframe
- Emotional ability to handle risk
- What you can afford to lose
- How you react when the markets go up and down
Please contact me at 217-971-1256 or sandy@ssfinancialgrp.com if you’d like to discuss your investing options given your personal risk tolerance.