Risk Tolerance

Risk tolerance refers to an individual's ability and willingness to endure potential losses in investments or decision-making. It reflects how much uncertainty a person is comfortable with when it comes to financial outcomes or other risky situations. Those with high risk tolerance may pursue aggressive investments for potentially higher returns, while those with low risk tolerance prefer safer options, avoiding significant losses. Understanding your risk tolerance is essential for making informed choices that align with your financial goals and personal comfort levels regarding risk.