How Much Risk Is Right for You?

July 25, 2022
Every investor wants to maximize return—but you must first consider how much risk you can stomach.

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After you listen

  • For more information on risk tolerance and investing, talk to your financial advisor or a Schwab representative at 877-279-4476.
  • And check out informative articles on a variety of investing topics at Schwab.com/Learn.
  • For more information on risk tolerance and investing, talk to your financial advisor or a Schwab representative at 877-279-4476.
  • And check out informative articles on a variety of investing topics at Schwab.com/Learn.

Balancing the trade-off between risk and return is one of the most fundamental decisions an investor makes. But it can be difficult to "know thyself" and truly understand your risk tolerance. Myriad psychological factors may cause you to behave differently than your stated risk profile when confronted with market volatility. And beyond weathering the ups and downs of the market, there are other types of risk that can impact the pursuit and achievement of your financial goals.  

In this episode, Mark is joined by Susan Hirshman, CFA®, CFP®, CDFA®—director of wealth management for Schwab Wealth Advisory. Susan shares her perspective on risk from her years working as an advisor to high-net-worth and ultra-high-net-worth investors. Susan and Mark discuss the difference between risk tolerance and risk capacity, how to determine your true risk tolerance, and how a wealth management plan can help you stay the course when your risk tolerance is tested.

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Financial Decoder is an original podcast from Charles Schwab. For more on the series, visit Schwab.com/FinancialDecoder.

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