Factors to decide Asset Allocation Strategy

You need to remember the factors that would affect your asset allocation strategy. Some of them are as follows:-

Risk Capacity + Risk Appetite + Risk Tolerance = Overall Risk Profile

Understanding risk appetite, risk capacity and risk tolerance is very important before making any investments or any investment decisions.

Factors Affecting Personal Risk Profile

Risk taking capacity, appetite and tolerance changes depending upon various information and factors. This can be understood with the help of following points:-

Financial Life Cycle based on Personal Risk Profile

How your Risk Profile changes in your complete life cycle and how it impacts your Financial Profile.

Risk Appetite v/s Risk Capacity v/s Risk Tolerance !!!

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 !!!