Identify Your Own Risk Tolerance – High Risk Or Low Risk
Posted at by ifydcat on category UncategorizedEach individual has a risk tolerance that should not be ignored. Any good broker or financial planner knows this, and they should make the effort to help you calculate what your risk tolerance is. Then, they should work with you to look for investments that will not exceed your risk tolerance.
Figuring out one’s risk tolerance will involve several different things. First, you need to know how much money you have to spend, and what your investment and financial plans are.
For instance, if you plan to retire in 10 years, and you’ve not retained the slightest penny towards that end, you should have a high risk tolerance – because you really need to do some aggressive – risky – investing in order for you to reach your financial objective.
On the other side of the spectrum, if you are in your early twenties and you decide to start investing for your pension, your risk tolerance will be low. You are going to afford to see your money grow slowly over time.
Notice of course, that your need for a high risk tolerance or your requirement for a low risk tolerance basically has no bearing on your feelings about risk. Once more, there is plenty in determining your tolerance.
For instance, if you invested in the stock market and you watched the movement of that stock every day and saw that it was decreasing slightly, what would you do?
Might you sell out or would you let your money ride? If you have a low tolerance for risk, you would certainly want to sell out… If you have a high tolerance, you would let your investment ride and see what the results are. This is not based on what your financial objectives are. This tolerance is dependent on how you feel about your funds!
Again, a good financial planner or trader should help you determine the level of risk that you are secure with, and help you select your investments appropriately.
Your risk tolerance should be established on what your financial goals are and how you feel about the probability of losing your money. It’s all tied in equally.
If you don’t want to work with risks, a practical thing to look at is taking your company public. If you want, you can do a search on the web for “company going public”, “reverse merger” or “reverse merger shell” and you should be able to find some good advice and suggestions.