What’s the difference between risk level and risk tolerance?
Risk tolerance is how much risk you feel you can take.
People who are prepared to risk bigger losses for the potential of bigger rewards can tolerate a high level of risk.
People who want to play it safe and are willing to have potentially smaller returns to guard against loss can tolerate less risk.
On Stash, an investor’s risk level is based on a number of factors.
All clients are categorized as Conservative, Moderate, or Aggressive.
Determining each investor’s risk tolerance helps determine their risk level. We also take into account their financial situation, age, and a variety of other factors.
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