What's Your Risk Tolerance?
One of the first activities I conduct with my financial planning clients is try to get a sense of their risk tolerance. This information can be helpful when deciding their level of comfort in investing in various asset types. Numerous studies about risk tolerance have demonstrated that people are more sensitive to investment losses than they are to investment gains. People also often don't respond in a way they indicated they would when a situation turns south. For some people, they hear the work "risk" and associate it with loss. In life we face many risks, but there may also be positive outcomes. "Nothing ventured, nothing gained" comes to mind. Perhaps you would like to take this free, no obligation investment risk tolerance quiz that is part of an ongoing research project by Dr. Ruth Lytton and Dr. John Grable and hosted by the University of Missouri Personal Financial Planning program.