In my previous blogs titled "What I wish I knew at age 25: Understanding investment risk" and "How much money are you prepared to lose" I said every investor, including me, has to know their own appetite for risk before they can even think about targeting the returns they’d like to get. Basically, how much money are you prepared to lose in the short term in order to reach your long-term goal?
Last time, I told you how Riskalyze is specifically designed to match how much you are prepared to lose money (risk) in the short term against your long-term goals (returns). I’ll go into that a bit more later, but first let me tell how badly the investment industry has let down ordinary investors.
I wish I knew at the age of 25 what I know now. Back then, with my first real money to invest, I was clueless about how much risk I was prepared to take and what returns I was looking for. So I filled in the old-fashioned question-and-answer thing every investment adviser gives you and I was advised that I fell into the “moderately aggressive” category.