Has your risk tolerance changed because of current affairs? It’s not surprising if it has. Many investors make changes to their portfolios based on what goes on in the news. The problem is investors who make decisions based on emotions typically make bad decisions. Only life changes and changes in financial goals should influence how you invest and the level of risk you are willing to take.
When you are young, you can afford to take more risks because you have time to recoup potential losses. But that doesn’t mean you have to. If you don’t feel comfortable taking risks then you shouldn’t make high-risk investments. It’s just that simple. Cryptocurrency is an example of a risky and volatile investment option that isn’t right for everyone. Lots of people invest in crypto but very few invest successfully. Even more concerning, 1out of 4 of the nearly 65 million crypto investors claim to have had issues accessing or withdrawing funds. If you have a low risk tolerance, crypto is not for you.
Stocks can offer higher risk with a higher return on investment over time, but market downturns happen. While all portfolios can benefit from having some stocks, a portfolio that is heavy on stocks may not be right for someone approaching retirement age. No matter your age, never buy or sell stocks because of a news headline. Always talk to an investment advisor before making any important financial decisions.
If you’re new to investing, we can teach you to balance risk and reward. We’ll help you determine your risk tolerance then enable you to create an investment portfolio that reflects your risk, timeline, and goals. Call Alloy Investment Management at 800-689-3935. We look forward to meeting you!