How to Find Your True Risk Tolerance and Build the Right Asset Allocation
When it comes to investing, one decision stands above the rest: how you allocate your assets. Get this right, and you set yourself up for long-term growth and peace of mind. Get it wrong, and you could be in for sleepless nights—or worse, costly mistakes.
But how do you know what percentage of your money should go into safe, secure investments (your “security bucket”) versus higher-risk, higher-reward opportunities (your “risk/growth bucket”)? The answer starts with understanding your true risk tolerance.
What is Risk Tolerance—and Why Does It Matter?
Risk tolerance is your ability and willingness to handle swings in the market and potential losses. It’s not just about numbers—it’s about your emotions, your stage of life, and your unique needs. If you crave certainty, you’ll want more in your security bucket. If you thrive on variety and growth, you might be comfortable with more risk.But here’s the truth: Most people don’t know their real risk tolerance until they’ve faced a real loss. That’s why it’s critical to get honest with yourself before you invest.
Unlock the proven strategies that can help you achieve true financial freedom—no matter where you’re starting from.
Read Tony Robbins' blockbuster financial book3 Steps to Discover Your Risk Tolerance and Build Your Asset Allocation
- Assess Your Stage of Life and Financial Goals
Are you just starting out, building wealth, or preparing for retirement? Your age and goals will shape your ideal mix of security and growth.
