Risk tolerance

When people invest into stocks or funds, they measure VAR to specific stocks, and they can estimate how much they could lose in the worst cases. If they have enough money to lose more money, we called they have high-risk tolerance. Risk tolerance is the how much you can accept loses. Thus, people need to know their current risk tolerance, and they need to choose right investing methods for their current situations. If they have high-risk tolerance, it means they can take higher risks, so they can invest more aggressively. If people have low-risk tolerance, of course they can take higher risks, but I do not recommend that because once they lose in higher risks, they would not afford to pay the amount of loses.
There is another part of risk tolerance, and it is emotional risk tolerance. It is related with financial risk tolerance because if you have more money, you are less likely to get stressed on losing. However, I recommend you to invest own your style, for example, if you have a lot of money, but do not want to take higher risk, then I recommend you to invest in corporate bonds otherwise you get stressed. I know many individual investors are watching their portfolios with computers almost eight hours a day, and do nothing. I do not want people to do like that especially if they are individual investors.
In conclusion, you need to know your risk tolerance financially and emotionally, then you should be fine on your invest.

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