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Author Topic: Risk tolerance in investment  (Read 90 times)

YgiedaTjan

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on: December 05, 2023, 05:45:24 PM
Risk tolerance in investment

Risk tolerance means how much you can tolerate when the value of your investment fluctuates. Are you willing to take big risks for potentially big profits? Or do you need a more conservative portfolio? Risk tolerance can be both psychological and your personal financial situation.

Conservative investors or those nearing retirement may be more comfortable allocating a larger portion of their portfolios to lower-risk investments. They are also perfect for people saving for both short- and medium-term goals. If the market gets volatile, investments in CDs and other FDIC-protected accounts won't lose value and will be there when you need them.

Those with strong stomachs, workers still accumulating a retirement nest egg and those with a decade or more until they need the money are better off with risky portfolios. There are likely to be, as long as they are diverse. A longer time horizon allows you to ride out the volatility of stocks and take advantage of their potentially higher returns, for example.



 

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