The Danger of an Undefined Risk Tolerance

Experience can help develop one’s risk tolerance, but there are limits. However, that develop cannot happen without first defining it today and then building it with the experience of continually thoughtfully monitoring one’s tolerance over times and various markets. All investors have, and often focus a lot of attention, on their high “gains” tolerances, but not enough focus as much or more time on the risks their need to weather and overcome to achieve them.