Understanding risk appetite, risk capacity and risk tolerance is very important before making any investments or any investment decisions.
Risk taking capacity, appetite and tolerance changes depending upon various information and factors. This can be understood with the help of following points:-
The investment choices that an individual makes should be aligned to their risk profiles. The risk profile defines how much risk that particular investor is willing and able to take. This will determine his asset allocation. Risk Appetite is the willingness of an investor to take risk. The asset class and investment options selected should … Continue reading Risk Appetite v/s Risk Capacity v/s Risk Tolerance !!!