(From the blog of one of our trusted partners, Galia Gichon)
When you think about investments, the two most important questions to ask yourself are:
“What is my time frame for this money?”
“What is my risk tolerance?”
When you stop and think about risk tolerance and turn off all the outside noise that makes you worry senselessly and is out of your control (i.e. situation in Ireland or amount of money China is lending), you actually know your risk level. The key is to tap into your intuitiveness and don’t think about it on financial terms. Think about it instead personally.
A great place to start is just by asking yourself important (and fun) questions (some questions are from a RUTGERS study). When looking at your answers, your risk tolerance usually becomes apparent and some of us end up surprised! There are also 5 important risk categories to see which you fit in!