How did you personally find out what your risk tolerance was? If you find yourself stressed out...

Question:

How did you personally find out what your risk tolerance was? If you find yourself stressed out by an investment decision, does that imply that you are risk-averse?

Investment Decisions:

The term investment decisions refer to the decision made by an individual investor or an organization to invest the specific amount of money in the various investment opportunities to generate a maximum return in the future.

Answer and Explanation:

The risk tolerance was decided by the amount of money an individual can afford to give up or lose. It also refers to the amount which would not affect the earning capacity of an investor. Such an amount of money helps or enables an individual to decide its risk tolerance capacity.

No, the stress out of the investment decision doesn't imply that an individual is a risk-averse. There can be some more reasons to be in stress from the investment decision. The stress can be regarding the sizing of the portfolio or about its diversification to generate the good returns out of the investment made.


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