Assessing Your Risk Tolerance

No Pain No Gain?

When it comes to investing, risk and reward go hand in hand

The phrase “no pain, no gain” – comes close to summing up the relationship between risk and reward. All investments involve some degree of risk. If you plan to buy securities – such as stocks, bonds, mutual funds, or ETFs – it’s important that you understand that you could lose some or all of the money you invest.

The reward for taking on risk is the potential for a greater investment return.

Let’s assume you have a financial goal with a long-time horizon, you may make more money by investing in higher risk assets, such as stocks or bonds, than if you limit yourself to less risky assets. On the other hand, lower risk cash investments, such as money markets or CD’s, may be appropriate for short-term financial goals.

Curious To See How Different Investments May look On A Risk Scale?

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An aggressive investor, or one with a high-risk tolerance, is willing to risk losing money to get potentially better results.

A conservative investor, or one with a low risk tolerance, favors investments that maintain his or her original investment.

understanding your risk tolerance

3 things to consider

How to calculate risk:

Many investment websites offer free online questionnaires to help you assess your risk tolerance. Some of the websites will even estimate asset allocations based on responses to the questionnaires. While the suggested asset allocations may be a useful starting point, keep in mind that the results may be biased towards financial products or services sold by companies or individuals sponsoring the websites.

In our humble opinion, one of the better ways to determine your risk tolerance is through a good ole fashioned one on one conversation where a candid exchange with one of our advisors can lead to a wholistic result.

We know, conversations are so 2018. The new world is about taking a test and pretending we answered the questions honestly.

All kidding aside, our friendly advisors are trained to artfully blend a Quiver of knowledge and valuable real-life experience to help you simplify what may seem complicated.

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