Know your risk tolerance and the investment's goal



You need to determine your risk tolerance before investing. Most of the time, increasing age and financial responsibilities reduce risk tolerance. However, if you want a greater SIP investment return, you must improve your risk tolerance.

  • Understanding your investment goals is crucial after determining your risk tolerance.

  • You use investments to achieve your financial objectives. You may have several goals, such as funding the education and marriage of your children, purchasing a new car, going on a trip, retiring, etc. You may also have a specific objective for which you wish to increase your wealth.

  • Therefore, knowing your SIP investment goal is essential. This is because it will enable you to create a portfolio that is properly balanced between shares and debt.

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