And the third factor to choosing the right asset allocation is your risk tolerance.
Risk which you take when you are investing is necessary for reward. But if you take more risk than you can handle can easily be torture for you. And this will lead to you pulling your money out of the stock market.
Risk tolerance can depend on the way how your portfolio is tracking relative to your goals towards investing.
If you already have experience with risk, you may want to be willing to take more risk than someone who doesn’t have experience with risk.
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