Know Thyself: How Risk-Tolerant Are You Really?
Many Happy Returns
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Understanding Risk Tolerance
This chapter explores the complex nature of risk tolerance, examining the various factors that influence individual attitudes toward risk, including age, gender, income, and education. It highlights significant trends from research, revealing how risk tolerance tends to decline with age while also noting the divergence between personal safety instincts and investment behavior. Additionally, the discussion critiques the effectiveness of risk tolerance questionnaires, emphasizing the importance of self-awareness and personal experience in making informed investment decisions.
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Transcript
