Determining Your Stock Market Investing Risk Tolerance
Risk tolerance is essential for taking stock market investing advice. As a first time investor, you'll discover that each person has a risk tolerance , which should be taken into account. Any reliable and professional financial planner or stock broker must know this so he can help you determine your risk tolerance. Then, that person needs to help you by recommending which stocks fit within your risk profile.
Many people think that risk tolerance is related only to your emotional reaction to investing.That's just not true. There is a lot involved in deciding the elements that affect risk tolerance for you, and emotions aren't the only factors involved.
Ascertaining your own risk tolerance, with regards to online stock market investing, requires that you consider multiple factors. One of those factors being that you know how much investment capital you have available, and you also have to be totally cognizant of what you are trying to achieve financially. For example, if you plan to stop working in 13 years and you haven't even started saving for retirement yet, you will need to keep up a high risk tolerance and do some hardcore investing to have enough cash to retire.
Conversely, if you start investing quite early for your retirement, your beginner stock market investing tolerance toward risk can remain low. Starting early will allow you to grow your money slowly. When you combine this with what you know about your emotional reaction to risk, you will have the investment formula that's right for you. It's hard to ascertain this for yourself, so it's best to use a knowledgeable financial planner or stock broker who can help you determine the risk tolerance you're comfortable with, and assist you with selecting appropriate investment opportunities.
Knowing your risk tolerance will help you establish an investment style and help you feel confident when you and your broker make investment decisions. Even though there are myriad investment types, there are really only three specific investment styles - and those three styles tie in with your risk tolerance. Those styles are commonly known as moderate, conservative and aggressive. But I will save the explanation of those for another article. Those will be clarified in a future article. - 23212
Many people think that risk tolerance is related only to your emotional reaction to investing.That's just not true. There is a lot involved in deciding the elements that affect risk tolerance for you, and emotions aren't the only factors involved.
Ascertaining your own risk tolerance, with regards to online stock market investing, requires that you consider multiple factors. One of those factors being that you know how much investment capital you have available, and you also have to be totally cognizant of what you are trying to achieve financially. For example, if you plan to stop working in 13 years and you haven't even started saving for retirement yet, you will need to keep up a high risk tolerance and do some hardcore investing to have enough cash to retire.
Conversely, if you start investing quite early for your retirement, your beginner stock market investing tolerance toward risk can remain low. Starting early will allow you to grow your money slowly. When you combine this with what you know about your emotional reaction to risk, you will have the investment formula that's right for you. It's hard to ascertain this for yourself, so it's best to use a knowledgeable financial planner or stock broker who can help you determine the risk tolerance you're comfortable with, and assist you with selecting appropriate investment opportunities.
Knowing your risk tolerance will help you establish an investment style and help you feel confident when you and your broker make investment decisions. Even though there are myriad investment types, there are really only three specific investment styles - and those three styles tie in with your risk tolerance. Those styles are commonly known as moderate, conservative and aggressive. But I will save the explanation of those for another article. Those will be clarified in a future article. - 23212
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posted by X - Men @ 3:27 AM
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