How to Determine Your Risk Tolerance

How to Determine Your Risk Tolerance
How much are you willing to risk for a gain? Shutterstock
Anne Johnson
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What are you willing to lose? Risk tolerance can be applied to many parts of our lives. But one part that hits home is our financial well-being. How much are you willing to risk for a gain? This can be a complicated question to answer.

Everyone is unique, and where you fall on the risk tolerance spectrum will guide your decisions. But how do you determine what you’re willing to risk when it comes to investing? Where are you on the spectrum?

Assessing Your Risk Tolerance

To assess your risk tolerance, you need to propose hypothetical challenges and worst-case scenarios.
Anne Johnson
Anne Johnson
Author
Anne Johnson was a commercial property & casualty insurance agent for nine years. She was also licensed in health and life insurance. Anne went on to own an advertising agency where she worked with businesses. She has been writing about personal finance for 10 years.