What’s yours? First, simply defined, risk tolerance is the desire for growth vs the need for safety. Said another way, it is how much can you afford to lose on an investment and still be able to sleep at night.

If conservative, you will be better suited strictly to products which provide safety of principal like savings accounts, CDs, money market accounts, or bonds. Conversely, if you have a high-risk tolerance, you will tend toward products like stocks, futures, commodities, or cryptocurrencies. Most likely you may fall in between the extremes so a mix of products will provide you more peace of mind.

There are multiple websites which offer free online questionnaires to help you assess your risk tolerance. Some will even offer asset allocations based on responses to the questions. Treat the suggestions as a reference for how you can possibly allocate your holdings since you may have unique situations or goals that require further analysis before you follow through.

As you plan your financial well-being a key to remember is, you grow your wealth by investing in assets or holdings which add to your net worth, not liabilities which deplete your resources without providing you with a return. Your risk tolerance is the starting point to choosing which assets suit you.