15+
Year Of Working Experiance
OMS understands risk tolerance
Designing an investment portfolio involves carefully considering three key factors: your time horizon, your attitude to risk, and your capacity for risk.
Your Time Horizon
Your time horizon is the duration you intend to keep your investments before needing to access the funds. It's a key factor in shaping your investment strategy, as different approaches suit different timeframes. For example, a longer time horizon allows for greater risk tolerance, since there's more time to recover from market fluctuations. Conversely, a shorter time horizon often calls for more conservative investments that offer stability and predictable returns.
Your Attitude to Risk
Your risk tolerance is a key element in building an effective investment portfolio. It reflects how comfortable you are with the potential for market losses. While some investors prefer conservative options with steady returns, others are open to higher risk for the chance of greater rewards. Understanding your personal risk profile is essential to selecting investments that align with your financial goals and peace of mind.
Your Capacity For Risk
Your capacity for risk refers to your ability to withstand financial losses without jeopardizing your overall financial stability. It considers both your current financial position and your future needs and commitments. For instance, an individual with a high income and minimal obligations may be better equipped to handle investment risk than someone with limited income and substantial debt. Recognizing your risk capacity helps guide how you allocate your portfolio between higher-risk and more conservative investments.
