If you learned how to save money successfully, sooner or later, many of us will be faced the question: “How can we invest our hard-earned money profitably — assets like shares, stocks, bonds, funds, certificates or gold?”

Obviously, you don’t want to make bad decisions that can lead you to money loss, and not the capital win.

To profit and grow your capital, you have to find the right investment strategy for you by dealing with your personal risk profile. Your risk profile will show which investments you correspond to and influences your investment strategy.

📊 Investment risk profiles

Four main factors have an impact on your risk profile:

🔹 Risk tolerance (how well you as an investor can cope emotionally with losses on your investments)

How much money are you emotionally ready to lose in the worse case?

The higher the personal risk tolerance, the higher the proportion of high-risk investments and asset diversification.

🔹 Risk capacity (the risk you can take according to your financial situation)

Do you have a regular and secure income?

The higher your regular income, the higher the risk you can take.

🔹 Knowledge of finance (Level of financial knowledge and experience with securities)

How well do you understand financial products?

The more you deal with investments, the better you can assess the risks.

🔹 Investment goal (It influences the money return from your investment that you want to achieve)

What do you want to achieve with your investment?

The higher the money return, the higher the risk you must take.

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