Accessing Your Risk Tolerance
When the markets are volatile, you may be hesitant to login to your retirement accounts to see how much your total savings may have decreased at that moment in time.
Instead of only looking at your bottom line, you also might want to look at your portfolio risk, which can actually affect the outcome of your investment returns. And if returns aren’t what you’re hoping for, your goals, like retirement, might be delayed.
What is risk tolerance?
Risk tolerance is the amount of risk investors can tolerate as it relates to the amount of loss they can handle in their portfolios. How close an investor is to retirement, investment goals and market volatility all weigh into how much risk he or she is willing to handle.
Keep in mind all investments involve some type of risk. Understanding your risk level helps determine how you invest your portfolio.
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Talk to a Wealth Advisor
Consult with your wealth advisor to help determine whether your risk tolerance has changed. If so, your advisor can work with you to rebalance your portfolio to align with your tolerance for risk and time frame toward reaching goals.