Every kind of financial investment carries some kind of risk. So how can you protect yourself and still make a profit? Jeff from Rossford recognizes investments carry risk, but wants to know how much he can tolerate. Risk tolerance is usually based on age or how much risk you’re willing to take. Some people say they're riskier, some more conservative. Your tolerance should a combination of how close you are to retirement and the amount of risk you are comfortable with. "Just because you're 25-years-old doesn't mean you need to have a lot of risk," said David Elrod, financial analyst with Generations Investments in Maumee. "There's a lot of 25-year-olds that might be very very conservative and don't want any risk, so it should be a combo of your age and your personal risk tolerance." The best way to balance risk is by having a well diversified portfolio, or collection of investments, Elrod says. Use various choices within the stock market-like options, which can be described as bets on a stock, or ETFs — exchange traded funds --- which are like mutual funds, but trade like a stock. Also ask your advisor about non-market investments, like certain annuities, that are insurance products, which limit or eliminate risk in a soft market, or REITs - a way to invest in real estate without actually physically owning property.
Every kind of financial investment carries some kind of risk. So how can you protect yourself and st...
