Understanding Your Tolerance for Risk

Successful investing requires that we understand the intimate connection between risk and returns. After all, not every investor is willing to stomach the sharp ups and downs in the market that may be required to hit it out of the park. Many would far rather pursue slow, steady progress toward their goals while exposing themselves to less risk and less market drama. While we can’t avoid risk entirely, we can take a clear-eyed look at the level of risk that you’re willing and able to tolerate, and then build a portfolio of investments that works for you.

To help give you this clear-eyed view, we use an intuitive but analytically robust tool from Riskalyze. In addition to estimating a likely upside and downside range of performance over any six month period, the tool allows you to stress test your portfolio – answering what-ifs like…what might happen to your portfolio if there were a repeat of the Financial Crisis, or what if there were a spike in interest rates?

To learn more about the tool, take a look at the video below, and then click on the link to see how well your current portfolio fits your needs and goals.