Risk tolerance

The risk tolerance article is intended to combine elements of the subject now mainly under “Risk and Return” (“Assessing Risk Tolerance”) and under “Asset Allocation” (“Need, ability, willingness”).

The goal is to make it easier for new investors to find risk tolerance and to find it mainly in one location. The page would begin with a new intro defining the basics of risk tolerance, in particular emotional risk tolerance, including what it is, why it's difficult to determine, and its key role in setting an asset allocation that stays the course.

Proposed outline:

Investing Start Up Kit

1 Are you ready to invest?

2. Understanding Risk, Introduction and explanation of terms used.

Financial Risk Tolerance

Emotional Risk Tolerance

Avoid common behavioral pitfalls.

3 Asset allocation

4 Create an investment plan

5 Create a well diversified, low cost portfolio

6 Maintain your portfolio

7 Notes