Investing for your risk tolerance

How do you know if your assets are invested in too aggressive a manner for your risk tolerance ? This is a question investors have been asking themselves for decades without coming up with a sensible answer.

Ask yourself these questions,

A. When you read the newspaper, watch the news on TV or go online to check your investment values, do you do it more than once per week ?

B. When you are looking at the value of your investments do you feel disappointed when the asset values have fallen?

If you answered yes to both of these questions your portfolio is probably too aggressive for your risk tolerance. If you are not convinced with my assessment how often do you check the value of your home?

If your answer is never it is because you are comfortable with the value of your home and you dont feel that a change up or down is relevant or worth worrying about. Some people check the value of their properties regularly and they are likely to have a lot of debt associated with the properties and are therefore again too risky for their risk profiles.

If the value of an asset is worrying you then it is too risky for your risk tolerance or it means you have too much invested. Life is too short to have these worries so realign your investments to some thing that you are comfortable with.