Risk Tolerance refers to an individual’s ability to handle the potential ups and downs of Investing. To determine your risk tolerance, consider the following:–
1] Time Horizon:- How long do you plan to invest for ? The longer your time horizon , the more risk you may be willing to take on.
2] Financial Stability:- Do you have enough Emergency savings or Stable income to weather market downturns ?
3] Investment Goals:- What are your Financial Goals and how much risk are you willing to take to achieve them ?
4] Personality:- Are you comfortable with taking risks or do you prefer a more conservative approach ?
Once you have considered these factors , You can take a Risk Tolerance quiz or speak with a Financial advisor to determine your Risk Tolerance level and make informed investment decisions.