Risk tolerance: two key questions
First, how comfortable are you personally with risk? This is a subjective measure, and it depends on many factors, including your financial goals, life stage, personality, and investment experience. The second key question is: how well is your investment plan set up to handle potential losses? The more resilient your overall plan is when faced with any potential losses, the more risk it might be able to take on. For example, time can be a powerful ally. The longer you're going to be invested, the more flexibility your investment plan might have to survive setbacks along the way.