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Before You Start Investing: Assess Your Investment Risk — Understanding Risk Required
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Understanding Risk Required

How Much Risk Do You Really Need?

Risk requirement is the component of your investment risk profile that has to do with your financial objectives. It relates to the level of risk you need to take to ensure that you can achieve your expected return with a high degree of certainty. In simple terms, the Required Risk measures how much risk you really need to take to achieve your goals. Yet again, this depends on your level of income, return expectations, and the investment goals you have in mind.

In view of all the above, your financial situation as an investor may be one the most important aspects to consider when managing risks. This is where net worth and risk capital come in.

Tap Next to see how to apply your net worth and risk capital in your investment strategy.