Your Money and Risk
Things can go wrong in the market,shares go up in value,then down in value. The same price changes can happen with property.
Risk ToleranceAll the experts agree that risk tolerance is important. It affects how comfortable we feel about making ‘risky’ decisions and in ‘risky’ situations. How we handle variabilty and day to day value changes is a critical factor in our financial lives, but:
- It can be quite difficult to be clear about someone else’s risk tolerance.
- Couples can have difficulty understanding one another and financial advisers often misread their clients.
- There are ‘rules of thumb’ – the young are more risk tolerant, as are males and singles. But the rules are ‘weak’. A young, single male can be less risk tolerant than an older, married female.
- Risk tolerance is stable but not set in concrete. It usually decreases with age and can be affected by life events (good or bad.)
CLICK HERE if you would like to take my risk tolerance test.
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