Attitude Towards Risk:
Your perception of risk may be different to your neighbour even though you are both e.g. "medium" risk investors - but that definition will be dictated by all of the above.
Tolerance to Loss:
Is different to attitude to risk.
What would be the impact on your current and future financial position for different levels of investment losses in the short, medium and long term? +/-5%, +/-10%, +/20% etc?
We always suggest that you work on Short Term (money needed within next 5 years), Medium Term (5 to 10 years) and Long term (10 years +). Then establish an overall risk profile e.g. low to medium, medium, medium high etc with the proportion of the amounts of money segmented in each time and risk factor category.
Finally, agree and set maximum tolerance to loss for each segment.
This site makes use of cookies to personalise content and provide certain functionality. Our site will not function properly without it. The financialadvice.net cookie only retains the session id, we store no personal information in cookies. For more information please read our Privacy Policy
If you're unsure about cookies, what they are and how to protect yourself from harmful cookies, please see our Cookie Set Up information page.
OK