Dinerovela Risk Tolerance: 3 Investing Risk Levels for Any Telenovela Character
Will Catalina end the love triangle… between her ETFs and bonds in El Pecado Prohibido?🔥 Will Paulina release her big secret… about investing in crypto La Amante Espía?🔪 Will Maria actually destroy… her lack of risk tolerance in La Profesora Culpable??💸
Ok, these stories may not be as full of the gripping, telenovela drama your abuelas love 👵 but doing things like assessing your risk tolerance may be more helpful in your financial life.👍 Risk tolerance looks at how much market risk an investor can withstand,📊 kinda like knowing how much heat you can handle in your salsa. 🥵These ups and downs in el financial drama can happen because of things like stock market swings, major political events or changes in interest. 📈
Just like each telenovela character has their storyline💄, each investor has a risk tolerance line that they’re willing to approach when it comes to investing. 🏦 Risk tolerance can depend on many factors: age, amount of disposable income, net worth, whether you’re willing to do whatever it takes to ride out a stock market slump! 📺 (CUE DRAMATIC STARE)📺
If risk tolerance was a telenovela, it would have three main investor protagonistas: the aggressive, risk takers like Héctor de los Reyes, the moderate balancers like Gael P. Gaviota, and the conservative, safe-bet reinas like Conchita del Corazón.
If you think of yourself as someone who would do whatever it takes to get ahead 📺 (CUE ABRUPT CLOSE UP)📺, you might want to look into riskier investments⚠️ like stocks which have higher expected returns🤑 but which also have higher volatility. Aggressive investors are usually more experienced and not scared of big swings the market can take. And like your abuelo who will hold on to those aguacates even when everyone else thinks they may be overripe,🤯 aggressive investors are not prone to panic sell.
If you’re more moderate, like a telenovela character wanting to save a la pobre inocente while also trying to serve your own interests,😳 you’re right in between aggressive and conservative. Which usually means your investments are also a balance of risky and conservative and you won’t risk more than you can afford to lose. 🙆♀️ So, that means you may earn less than an aggressive investor when investments rise but you also won’t lose as much when things aren’t going well.
Conservative investors prefer to play it safe in their investments.💆♀️ We don’t mean keeping el dinero abajo del colchón. 🛏 If you consider yourself conservative with your dinero, consider starting out with investments that are less volatile. However, just like even the most secondary character in a telenovela can get caught up in the drama🆘, even the most conservative portfolio can experience short-term losses. Having a diversified portfolio, including a wide variety of investment options, can help minimize your losses overall.
Something else to take into consideration is risk capacity. Risk capacity, NOT tolerance, is all about how much investment risk you are able to take on based off financial factors.💵 Like, la rica madre who the protagonist doesn’t KNOW is her mother until a dramatic event that unveils her as such 📺 (CUE DRAMATIC ZOOM IN)📺 .Well, she’s rich! She’s got a lot of capacity, so she can take on a lot of risk! Her financial situation is in much better shape than la pobre Maria at the beginning of the telenovela. BUT! With time, we all know that pobre Maria can be rich too. With the right investment strategy we mean.
Time and age are other factors in thinking about risk tolerance. Generally, more time means you can take more risks. Like multiple attempts to get rid of the woman who is standing in the way of your true love! 📺 (CUE DRAMATIC STARE)📺 Uh, sorry, we mean more risks in investing. 😆 And young, single investors with long term investing goals have, for the most part, time on their side to be aggressive and withstand any drops in their investments.
Thanks to our amig@s at Stockpile who want to help you start your investing journey by offering you a $15 match bonus💰on your first investment. And in case you didn’t know, Stockpile is an app that lets investors start their portfolios with as little as $1! You can claim your dinero by clicking HERE.
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