Portfoilo Tips: Risk Tolerance

December 31st, 2020 Take the $100K Options Challenge... Join the TraderMinute team to learn how they harnesses option trading to produce consistent, more reliable results over time... Read More When you are building a portfolio, one of the factors that you will need to consider is your risk tolerance. Risk tolerance relates to the amount of market risk an investor can tolerate. Financial planners often use risk tolerance to categorize investors and investing styles as aggressive, moderate, or conservative. Here is a breakdown of each of the categories of risk tolerance and what they mean: Aggressive Risk Tolerance People with an aggressive risk tolerance usually have a deep understanding of market securities and how the market works in general. Aggressive investors generally invest in areas that have the highest potential for gains, but the highest risks in losses as well. These investors are likely to have shares in penny stocks (we talked about those a couple of newsletters back), and fad stocks. Their portfolios also usually consist of more stocks than anything else. Moderate Risk Tolerance People with a moderate risk tolerance usually look for the balance between an aggressive portfolio and a conservative portfolio. They are usually long term investors who are willing to deal with some market instability, if a gain is possible in the long run. These investors usually own portfolios that consist of a majority of stocks, but these portfolios also contain more ETF's and Bonds than aggressive portfolios. Conservative Risk Tolerance If you have a conservative risk tolerance, that means you do prefer to have little to no volatility to their investment portfolios. To put it more simply, investors in this category are more willing to put their money on stocks that are most likely to result in either a gain or no loss. Conservative investors are likely to invest in stocks like Amazon (AMZN), Disney (DIS), and Apple (APPL). They also usually have portfolios that usually have larger percentages of ETF's and bonds. Be sure to mark our emails to keep receiving more tips for understanding financial markets and check in with us this Tuesday as we briefly go over stocks, bonds and ETF's! Tips4Traders For more awesome tips, news and information, visit our site...Register now This email is a paid advertisement. It is for a product or service that is not offered, recommended or endorsed by Tips4Traders.com and neither the company nor its affiliates bear responsibility or control over the content of the advertisement and the product or service offered. There is a very high degree of risk involved in trading. Past results are not indicative of future returns. Tips4Traders.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for any trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. By downloading this book your information may be shared with our educational partners. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of Tips4Traders.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.

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