Risk tolerance in investment portfolios will vary depending on age. The younger a person is, the more risk they may be willing to take. The closer someone is to retirement age, the less risk they may be willing to take. Yet there are principles and strategies we follow at Alloy Investment Management to help enable clients to put together an investment portfolio that best reflects not only their risk tolerance, but also time horizon, and goals.

No matter your age, when investing towards retirement, or any other financial goal, it’s important to balance risk with reward. Stocks may offer a better long-term return on investment, but stock market downturns are inevitable so a market portfolio would come with more risk. A balanced portfolio, on the other hand, will include stocks, bonds, and cash to help manage market risks while achieving goals. However, no two balanced portfolios will be identical because no two investors have the same time horizon or goals.

When determining risk tolerance, an investor should consider their age, debt-to-income ratio, personal comfort level, and time horizon, or point of time in the future they hope to achieve their financial goals. This information, along with the education we offer clients on investment management principles and strategies, can help take the guesswork out of investment decisions.    

If you’re new to investing or have a current investment portfolio you’d like us to offer our opinion on, please call 800-689-3935. We would love to help guide you toward your goals.