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Beth A. Botti, CFP®, ChFC, CLU, CDFA™
Financial Consultant
California Insurance License #0G24537
612 Wheelers Farms Road, Milford, CT 06460
Phone: 203-877-6556 Ext. 169
Fax: 203-301-0736
Email: beth.botti@equitable.com
July/August 2024
How Much Risk Can You Take
Whether your dream is to climb Mount Everest or sail the Caribbean in a pontoon boat, the amount of risk you feel comfortable with is different for everyone. That applies to investment risk, too. But how can you find your comfort level?
Your Risk Tolerance
Risk refers to market conditions that can negatively affect returns. Risk tolerance is your ability to accept the possibility of investment losses. Taking greater risk with your investments offers the potential for higher returns, but it also exposes your portfolio to substantial losses if the markets take a downturn. However, not taking enough risk can prevent you from earning returns that will help you reach your goals.Types of Investors
Investors generally fall into three categories based on their tolerance for investment risk.Aggressive investors are willing to accept more risk of investment losses in exchange for the potential for earning higher returns. Their portfolio typically holds equities and commodities, with little or no exposure to bonds or stable value investments.
Moderate investors are willing to accept periods of market volatility in exchange for the possibility of earning returns over time that significantly outpace inflation. Their portfolios typically consist of a mix of equities and income-producing investments, such as bonds.
Conservative investors accept little or no volatility with their investments. They seek income and capital preservation. Their portfolios hold investments that are highly liquid (i.e., can easily be turned into cash), such as certificates of deposit, money market accounts and U.S. treasuries.
Your Time Frame
Risk tolerance can change based on your age, goals and time horizon. Investors in their 20s, 30s and 40s generally can take more risk with their investments because they have many years before they’ll need their savings. As you get closer to retirement, you may want to shift some higher risk investments into less volatile, income-producing assets. Keep in mind, though, that keeping a portion of your portfolio in equity investments can provide a hedge against inflation.Your financial professional can help you design a portfolio based on your goals and risk tolerance.
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Duly registered and licensed financial professionals offer securities through Equitable Advisors, LLC (NY, NY 212-314-4600), member FINRA,SIPC (Equitable Financial Advisors in MI & TN), offer investment advisory products and services through Equitable Advisors, LLC, an SEC-registered investment advisor, and offer annuity and insurance products through Equitable Network, LLC (Equitable Network Insurance Agency of Utah, LLC in UT; Equitable Network of Puerto Rico, Inc.). Equal Opportunity Employer - M/F/D/V. Equitable Advisors and its associates and affiliates do not provide tax, accounting, or legal advice or services. Representatives may transact business, which includes offering products and services and/or responding to inquiries, only in state(s) in which they are properly registered and/or licensed. Your connection to this website does not necessarily indicate that the sender is able to transact business in your state. The information in this website is not investment or securities advice and does not constitute an offer. For more information about Equitable Advisors, LLC you may visit https://equitable.com/crs to review the firm's Relationship Summary for Retail Investors and General Conflicts of Interest Disclosure.
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CFP®, and CERTIFIED FINANCIAL PLANNER™ are certification marks owned by the Certified Financial Planner Board of Standards, Inc. These marks are awarded to individuals who successfully complete the CFP Board's initial and ongoing certification requirements.
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