Mind & Money: understanding ourselves and our attitudes to risk
On The Money
00:00
How to Separate Risk Tolerance From Composure
Risk tolerance is a stable long term willingness to trade off risk and return over a 5, 10, 15 year period. The other piece that's important is quite different and we can think of it as composure. If I'm a high risk tolerance person but I have low composure it is likely that I will make mistakes along the way. It has everything to do with understanding your own tendency towards anxiety along the ups and downs of the journey.
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