Risk is the most misunderstood area among common investors. Risk Profiling plays a vital role in differentiating between Investment Returns & Investor Returns. Understanding The Risk Tolerance, Risk Required and Risk Capacity makes all the difference.

Know Thyself is intended to understand a) Risk Tolerance b) Risk Required c) Risk Capacity. So, Risk Tolerance and Risk Profiling is a process for finding the optimal level of investment risk for you, by balancing your Risk Required, Risk Capacity and Risk Tolerance.

a) Risk Tolerance is the level of financial risk you are emotionally comfortable with.
b) Risk Required is the risk associated with the return required to achieve your financial goal from the financial resources available.
c) Risk Capacity is the level of financial risk you can afford to take.

There are risks of losing capital and there are risks of volatility. Risk of volatility is inevitable for higher return. Notional loss due to negative volatility is acceptable, whereas risk of losing capital is not acceptable.

Multi asset and well diversified portfolio are well established ways to get risk adjusted return with aim for lower volatility.

And who will design and monitor such a plan for you, considering your risk appetite, biases, behavior and investment blind spots?

To know Your Risk Profile, Click Here