what is risk tolerance?

[S.ARCHANA]

Term: Risk tolerance                                                                                                                                                                                                                                                                                   Meaning: <span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>An</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> investor’s</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>ability</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>or</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>willingness</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>to</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>accept</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>declines</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>in</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>the</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>prices</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>of</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> investments</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>while</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>waiting</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>for</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>them</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>to</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>increase </span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>in</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>value. </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>Risk</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>tolerance</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>is</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>the</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>extent</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>to</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>which</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>you</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>as</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>an</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>investor</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>are</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>comfortable</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>with</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> risk of </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>losing</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>money</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>on</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>an</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>investment.</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>If </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>you’re</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>unwilling</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>to</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>take</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>the</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>chance</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>that</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>an</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>investment</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>that</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>might</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>drop</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>in</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>price,</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>you</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>have</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>little</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>or</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>no</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>risk</span><span style=”color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”> </span><span class=”hvr” style=”box-sizing: inherit; color: #404040; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px;”>tolerance.                            Statement Formation: Risk of substantial reputation,non-substantial financial loss or exposure,broard or extended information systems ‘down-times’ or integrity in loss.                                                                                                                     </span>

[Hari priya]

An investors ability or willingness to accept declines in the prices of investments while waiting for them to increase in value.

[Aravind Kumar]

Risk tolerance is the degree ofvariabilityin investment returns that an individual is willing to withstand. Risk tolerance is an important component ininvesting. An individual should have a realistic understanding of his or her ability and willingness to stomach largeswingsin the value of his or her investments. Investors who take on too much risk may panic and sell at the wrong time.

[Jayalakshmi. j]

An investors ability or willingness to accept declines price of instrumy while waiting for them increase in value.

[Arunkumar.B]

Risk tolerance is the extent to which you as an investor are comfortable with the risk of losing money on an investment. If you’re unwilling to take the chance that an investment that might drop in price, you have little or no risk tolerance.

[Author]

Posts