Are you the kind of person that jumps right into the pool, someone who goes slowly down the ladder, or are you just happy to sit on the side with a toe in? There’s no right or wrong answer here. Everyone has their own comfort level.
In investing, your comfort level is called risk tolerance. It’s how much risk you’re willing to take. And it can vary wildly throughout your lifetime.
When you’re younger, you have lots of time on your side to recoup losses if an investment has a bad year. As you get older, you might decide that you’re not comfortable with certain types of investments anymore. So you can lower the risk in your portfolio by choosing investments that are less risky.