Risk tolerance is the degree of variability in investment returns that an individual is willing to withstand.
 | | Risk Tolerance | | Risk tolerance is the degree of variability in investment returns that an investor is willing to withstand. Risk tolerance is an important component in investing. You should have a realistic understanding of your ability and willingness to stomach large swings in the value of your investments; if you take on too much risk, you might panic and sell at the wrong time. | | Breaking it Down: | | Risk tolerance assessments for investors abound, including risk-related surveys or questionnaires. As an investor, you may also want to review... | | Read More » | | Related to "Risk Tolerance" | | | | Balanced Fund | | Balanced funds invest money across a mix of stocks, bonds and sometimes other low- to medium-risk securities. | | Read More » | | | Variability | | Variability is the extent to which data points in a statistical distribution or data set diverge from the average, or mean, value as well as the extent to which these data points differ from each other. | | Read More » | | | Swing | | A swing is a fluctuation in the value of an asset, liability or account. | | Read More » | | | Risk Management | | Risk management occurs anytime an investor or fund manager analyzes and attempts to quantify the potential for losses in an investment. | | Read More » | | | | | | CONNECT WITH INVESTOPEDIA | | | | | | | |
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