Investment risks are a normal part of investing, as with anything that gives a high return. So understanding your level of risk tolerance and experience is important before you embark on your investment journey.

Perhaps the thought of investing keeps you up at night and you prefer to have total control over your wealth and assets? There’s nothing wrong with this, in fact there are many people in the same boat. But understanding where your risk tolerance sits will enable you to invest and build wealth for the future within a healthy boundary. 

Is investing risky?

Our answer to this question lays in your motive for investing. If your reason for investing is to make some quick money so you can buy the latest gadgets, then yes, investing may be risky due to unpredictable market conditions and fluctuations over a short period of time. 

But, if your reason for investing is to set yourself up for the future, then investing can provide a path to financial freedom. While the market does experience volatility from time to time, playing the long game and diversifying your portfolio will ensure you see a positive return on your investment. 

Determine your risk profile

So how can you determine where your level of risk sits? 

For most it’s pretty easy to determine the level of risk they’re comfortable with. Perhaps you get an uneasy feeling in your stomach when thinking about investing, in which case you may identify as a cautious investor. 

On the other hand, you may be an avid investor, one who feels excited by the opportunities investing presents. These people often understand market fluctuations and are committed to playing the long game. 

What can you do if you have a low risk tolerance? 

Having a low risk tolerance does not mean that you have to miss out on opportunities to build your wealth. In fact, acknowledging where your comfort zone and risk tolerance sits, in terms of investing, is a perfect first step. 

People tend to grow within their comfort zone, given trusted advice and knowledge is shared and discussed. Pushing yourself to take risks that you may not be comfortable with may do more harm than good! 

That’s why partnering with a trusted financial advisor who can provide sound advice may be beneficial in your investment journey. Having someone who you can discuss your concerns with and talk about the best options and opportunities, will enable you to grow your wealth in a way that won’t leave you pulling out your hair! 

Book a complimentary discovery session, and take the first step towards building your wealth for the future.