Would you rather have a guaranteed $10,000 today or the opportunity to earn anywhere from $5,000 to $20,000over the next 12 months? Are you willing to risk a sure thingfor the opportunity for more? There are 4.8 million children in the UK aged 0-5.
Many parents choose to look after their … Your answer to that question shouldbe dependent upon two factors: your tolerance for riskand your ability to take risk. Risk tolerance refers to how comfortableyou are with fluctuations in your account balance. Think back to the last market downturnwhen you saw your portfolio drop in value. Today we are going to take apart an iPhone I am going to show you how to take off and replace th… What did you do? It is important to be honest with yourself,because you don’t want to take on more risk than you are comfortable with. While risk tolerance refers to how muchrisk you can psychologically handle,your ability to take risk refers to how muchrisk your plan can withstand. In other words, would you still beable to reach your goals if a bad outcome occurred? Factors like your time horizon, your ability to be flexible,and your other income sources would allplay into how much risk you are actually able to takefrom a financial standpoint.
Now, just because you have the financial capacity to take riskdoesn’t mean that you should, and just because youhave a high tolerance for risk doesn’tmean that you are in a situation where you can take risk. It is a delicate balancing act, but one you want to get right,as it will be one of the biggest determinants of your investmentsuccess.