Understand your risk tolerance
Being an investor does not mean being reckless. It would help if you were practical while making investment decisions. Measure the risks of every investment keenly and select only as much risk as your goal needs, and you can manage.
The fact that you can take an investment risk does not necessarily mean that you should. Risk tolerance is the ability of an investor to undergo the possibility of losing money on an investment.
People’s risk tolerance can change throughout their lives, considering factors like financial standing or life circumstances. For instance, a young person with no child and many responsibilities saving up for retirement might have a higher risk tolerance than an older person with a family and more responsibilities.
Younger people might be more willing to buy riskier assets since they will have much time to compensate for any losses; unlike an older person who is almost retiring, he might want to engage in less risky investments.