What Should Your Investing Risk Level Be? Risk Tolerance vs Risk Capacity

Описание: One of the most important concepts when it comes to investing in the stock market is risk-level.

Investing risk-level is the level of risk that you take on within your investment portfolio, and there's two main components of rick-level - risk tolerance and risk capacity.

Risk tolerance is the emotional side of the equation - it’s all about how comfortable you are with the idea of losing money in the short-term in order to earn a higher return over the long-term. Risk capacity is the factual side of the equation - it’s all about the amount of risk you can actually responsibly take on without negatively impacting your long-term financial stability.

In this video, we're going to explain why your investment portfolio should ideally be based on your risk capacity and not your risk tolerance, and how filling the knowledge gap between the two is key.

0:00 What is investing ‘risk-level’?
2:27 High, low, and moderate risk investments
4:48 How risky are passive ETFs?
6:59 What does it mean to have a low risk tolerance?
9:34 Risk level should ideally be based on risk capacity

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Disclaimer - This content is for education and entertainment purposes only. Steph & Den do not provide tax or investment advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. All investing involves risk, including the possible loss of principal.