In this week’s episode of Tape Talk, Quint and Daniel discuss the different ways investors should think about and view risk in their financial plan.
This week’s headline focus is back to China and trade. News broke during the week that China might be willing to make a deal, sort of. The problem with this news is that it’s quite ambiguous. The market, however, didn’t care and chose to rally on the potential for tensions to ease.
Tolerance is Key
Your risk tolerance is an important aspect of your financial plan. Your level of tolerance is dictated by what your portfolio can stand while still achieving the financial goals you set out.
Temperament is Important Too
Looking at your risk tolerance alone is dangerous though as it’s also important to understand your temperament for risk. It’s this metric that is better known as your “sleeping comfort” or what level of volatility you can handle and still sleep well at night. After all, it doesn’t matter if your portfolio can handle the ups and downs in the market if your stomach cannot!!