Before Investing Evaluate Your Risk Appetite And Risk Tolerance

There is trade off of risk and return in every aspect of life. The higher the risk, higher will be the return. Risk plays an important role in taking investment decisions but most of us are unaware of how to determine it. There is difference between risk appetite and risk tolerance. These terms are mostly used interchangeably. Risk appetite means your readiness to take risk and risk tolerance means the ability to do so. For example, you might love racing (which is your risk appetite) but you must be physically fit to do so (which is your risk tolerance). Risk […] Read more