Investment Risk and Return Expectations
Investing always involves a certain level of risk, and it’s important to have realistic return expectations based on your investment goals. In general, the higher your potential returns, the higher the risk you’ll need to take on.
One way to assess your risk tolerance is to consider how you would react to a significant drop in the value of your investments. If you would panic and sell off your investments, you may be taking on too much risk. On the other hand, if you are comfortable with short-term fluctuations and believe in the long-term potential of your investments, you may be willing to take on higher levels of risk.