Know Investing & Measured Risks

While investing, you need to take some risk. Measured risk—what does it mean?

- PV SUBRAMANYAM

Taking measured risks while investing involves balancing potential rewards with the likelihood of losses, aligning your decisions with your financial goals, risk tolerance, and time horizon:

Understand your risk tolerance and goals

Assess risk tolerance: Evaluate how much loss you can handle emotionally and financially. Younger investors or those with stable income might tolerate more risk, while retirees may prefer safety.

Define goals: Clarify your objectives (e.g., retirement, buying a home, wealth growth) and time horizon. Short-term goals (1–3 years) require lower risk, while long-term goals can handle more volatility.