Risk Tolerance and Risk Capacity
Put more concisely, risk capacity can be situationally dependent, where risk tolerance may be built more into our DNA.
Put more concisely, risk capacity can be situationally dependent, where risk tolerance may be built more into our DNA.
We’d all take heed to avoid searching for perfection in our portfolios by regularly shifting and tinkering and instead accepting the consistency of an appropriate allocation. We may not win the 1999 French Open in dramatic fashion like Andre Agassi, but we’ll at least have given ourselves gives the best odds of getting where we want to go.
Efforts towards achieving perfection usually end up as disappointments, because perfection is ultimately unattainable. And if we strive only for perfection, then we’ll often leave tasks or projects unfinished or feel like we've failed.