“Before deciding on what level of portfolio risk an investor wants to target, they first need to assess the comfort level with risk, or volatility,” says Niestradt.
“Before deciding on what level of portfolio risk an investor wants to target, they first need to assess the comfort level with risk, or volatility,” says Niestradt. “Does it make them nervous to invest when they see the S&P 500 drop over 24% as it (did in 2022)?” she adds. These questions are important as there’s no point in investing if you panic every time your portfolio loses value and sell everything. This will only result in you losing money when the goal is to grow your wealth over time.