Investing

What Is Risk Tolerance? Risk tolerance is the degree of risk that an investor is willing to endure given the volatility in the value of an investment. An important component in investing, risk tolerance often determines the type and amount of investments that an individual chooses. Greater risk tolerance is often synonymous with investment in

Long-term investments are exactly what they sound like: Investments you intend to own for a long time frame — often, five years or more — despite potential short-term volatility. Retirement investments are one classic example of long-term investments. Financial advisors generally say that the best long-term investment is a low-cost index fund. A low-cost index fund…

Short-term investments minimize risk, but at the cost of potentially higher returns available in the best long-term investments. As a result, you’ll ensure that you have cash when you need it, instead of squandering the money on a potentially risky investment. So, the most important thing investors should be looking for in a short-term investment…