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Are You Taking on More Investing Risk Than You Can Handle?


WKBT
February 1, 2021 6:47 AM
newsfeedback@fool.com (Diane Mtetwa)
Posted:
Updated:
February 2, 2021 10:31 AM
The more risk you take when investing, the more potential there is for your accounts to grow. But on the flip side, the riskier your investments, the more they could suffer if the market turns against you.
Finding the optimal level of risk you should take on is unique to you and could change over time, but it should always take into consideration these five questions.
Image source: Getty Images.
1. What is your investing time horizon?
When will you need to tap into the savings in your accounts? If you experience stock market losses, the longer you have before you will use your money, the more time you will have to recover those losses. For example, if you invested $100,000 into large-cap stocks at the beginning of 2001 with the intention of using it at the beginning of 2003, your portfolio value would’ve declined to about ....

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