Although your broker has a duty to recommend investments that are suitable for you, you should still take the time to get a good idea of your own risk tolerance and attitude toward risk. Your risk tolerance is one of the most important factors when considering the suitability of an investment, and it is important that you always carefully discuss potential investment risks with your financial professional before you decide to hand over your cash.
Determining investment risk can be complicated and nuanced, but there are some basic concepts you should be aware of. To get started, here are three simple things to keep in mind about investment risk and suitability:
- Higher returns come with higher risk.
- The higher the risk, the greater the chance you could lose your capital.
- You can generally withstand a higher short-term risk for long-term investments.
If you believe your broker recommended an unsuitable investment for your risk tolerance, please speak with an investment misconduct lawyer for a free evaluation of your case. You can also receive a FREE copy of our book Five Signs of Investment Fraud…And What to Do if It’s Happened to You by giving us a call or filling out the online contact form on this page.
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