Risk Tolerance for Beginners (Simple Explanation)

Risk tolerance = how much up-and-down you can handle without panicking.

Two parts of risk

• Ability: time horizon + financial stability
• Willingness: emotional comfort during drops

Quick self-check (educational)

• If your account dropped 20% for a year, would you sell in fear?
• Do you need the money soon?
• Do you have an emergency fund?

Build a simple plan: Beginner portfolio example

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