What is your risk tolerance when it comes to investing?
Before deciding on an investment strategy and portfolio mix, there’s a crucial piece of information you need: Your risk tolerance profile.
Simply put, risk tolerance is defined as the amount of risk that an investor is willing to put up with given the volatility in the value of an asset or investment.
While everyone’s risk tolerance is different, several factors will help determine your individual risk tolerance — and the amount of risk you’re willing to take in your investment strategy.
- Time horizon: How old, or young, you are and when you will need or want to use the money is a primary factor in your risk tolerance. Generally, the younger you are, the more time you may have to recover from losses in higher-risk investments. The older you are, the more risk averse you may be, worried that you won’t have time to recover from stock market losses.
- Impact on lifestyle: The amount of money you are comfortable allocating to investments will contribute to decisions regarding your personal risk factor. If your lifestyle depends on the money you invest, your risk tolerance will be different from another investor whose money, if lost, won’t alter his or her day-to-day living.
- Knowledge of investing: Some riskier investments require an in-depth knowledge of investing and may not be appropriate for someone who has limited knowledge. The more investing knowledge you have, the more comfortable you might be with a more aggressive portfolio.
- Personal comfort level: Your natural inclination may be to be more aggressive, or more prudent, which can have an effect on your investment decisions.
Online investment calculators can help assess your risk tolerance and provide a hypothetical asset allocation mix for you to consider. Generally, these asset allocation models may vary depending on which calculator you use.
Here are three of the most common types based on a risk profile quiz, that you can take yourself:
- Conservative: 70 percent cash/bonds, 30 percent stocks
- Moderate: 40 percent cash/bonds, 60 percent stocks
- Aggressive: 15 percent cash/bonds, 85 percent stocks
Additionally, there can be two extreme models, although either is unlikely in actual practice:
- Short-term/No risk: 100 percent cash/bonds
- Ultra-aggressive: 100 percent stocks
Your risk tolerance profile can help to appropriately diversify your portfolio for the level of risk you are willing to accept. Being diversified means combining a variety of assets to offset potential risks or volatility in any one particular asset. This strategy often works because different classes or categories of investments may not move in the same direction at the same time. One may go down in value, while another goes up. But while diversification can help mitigate risk, it won’t eliminate the chance of a market loss completely. Nor will it guarantee a profit.
By doing a little research, through reputable investment research firms or information provided by your employer-based 401(k) plan, you can fine-tune your investment portfolio. Your risk tolerance profile will help you select the right mutual funds, stocks, and bonds from the multitude available. And in the end, you’ll likely have a portfolio that meets your unique needs.
Provided by Matthew Clayson, courtesy of Massachusetts Mutual Life Insurance Company (MassMutual). CA Insurance License # 0I01304
©2024 Massachusetts Mutual Life Insurance Company, Springfield, MA 01111-0001 MM202708-310101
Physical Activity And Exercise
Adults need 150 minutes of moderate-intensity physical activity weekly. However, the Centers for Disease Control and Prevention reports that only 1 in 4 adults receive the recommended amount of physical activity each week.
Why is exercise important?
Research shows that those who are physically active are likely to live longer, healthier lives.
Physical activity can lead to many benefits:
- Weight maintenance
- Reduced blood pressure
- Improved blood sugar regulation
- Improved mental health
- Reduced stress
- Stronger bone density
In addition, a person who has hypertension, diabetes or a history of smoking can greatly benefit from including regular physical activity in their daily routine.
What should be included in an exercise program?
There are three main components to a well-balanced program of physical activity:
- Aerobic activity—Get at least 150 minutes of moderate-intensity aerobic activity (e.g., briskly walking) or 75 minutes of vigorous-intensity aerobic activity (e.g., running) every week.
- Muscle strengthening—Incorporate muscle-strengthening exercises at least two days a week. For the purposes of general training, focus on two to three upper body and lower body exercises. Abdominal exercises are an important part of strength training as well.
- Flexibility training—Flexibility training is important too, but it is frequently neglected, resulting in increased tightness as you age and become less active.
As with any change to your health and wellness regime, it’s important to talk to your doctor before you start exercising.
How can I get started?
Commitment to a regular physical activity program is more important than the intensity of your workouts. Choose exercises you are likely to pursue and enjoy, such as these activities:
- Walking
- Running
- Stair climbing
- Biking
- Rowing
- Swimming
Life is full of responsibilities that can pull you in multiple directions, and sometimes exercise takes a back seat to other obligations. But letting your fitness slip can create serious health risks down the road and make bad fitness habits even harder to break later on.
Where can I learn more?
For more information about exercise programs, please contact your doctor.
April Marks Distracted Driving Awareness Month
The National Safety Council designates April as Distracted Driving Awareness Month. This annual campaign is intended to raise awareness about the dangers of distracted driving and encourage drivers to minimize potential distractions behind the wheel.
Distracted driving contributes to nearly 400,000 injuries and 3,000 fatalities each year, according to the National Highway Traffic Safety Administration.
Distracted Driving Overview
The Centers for Disease Control and Prevention defines distracted driving as any activity that may divert a motorist’s attention from the road. There are three main types of distractions that can interfere with drivers’ attentiveness:
- Visual distractions involve motorists taking their eyes off the road. Some examples include reading emails or text messages, looking at maps or navigation systems, and observing nearby accidents or roadside attractions while driving.
- Manual distractions entail motorists removing their hands from the steering wheel. Key examples include texting, adjusting the radio, programming navigation systems, eating, drinking and performing personal grooming tasks while driving.
- Cognitive distractions stem from motorists taking their minds off driving. Primary examples include talking on the phone, conversing with vehicle passengers and daydreaming while driving.
Regardless of distraction type, distracted driving is a serious safety hazard that causes a significant number of accidents on the road. As such, it’s crucial to take steps to prevent distracted driving.
Prevention Measures
During this annual event and beyond, it’s imperative for businesses to educate their employees about distracted driving hazards and related prevention measures. Specifically, businesses should share the following guidance with their drivers:
- Put phones away. Drivers should silence their phones and store them out of reach to avoid checking them behind the wheel.
- Plan every trip. Before hitting the road, drivers should program their navigation systems and familiarize themselves with their journeys.
- Utilize in-vehicle technology. Drivers should leverage any technology within company vehicles that promotes safe driving, including hands-free communication devices, voice-activated controls and telematics solutions.
- Avoid multitasking. While driving, it’s best for drivers to refrain from completing additional tasks, such as eating or adjusting the radio.
- Stay focused. By keeping distracting conversations to a minimum and looking straight ahead, drivers can fully concentrate on the road.
- Maintain compliance. Drivers should comply with all company policies and applicable laws regarding distracted driving.
Contact us today for additional risk management resources.
The content of this News Brief is of general interest and is not intended to apply to specific circumstances. It should not be regarded as legal advice and not be relied upon as such. In relation to any particular problem which they may have, readers are advised to seek specific advice. © 2025 Zywave, Inc. All rights reserved.