It’s not in line with your risk tolerance
One other thing you should keep in mind when making an investment is your risk tolerance. This describes the variability in investment returns a person is willing to resist. Are you up for a stock that goes up or down by 4 percent every day? Or would it be too nerve-wracking for you to see?
Consider your tolerance for volatility and stay away from investments where the risk is too high for you, no matter how good they might seem at a first glance. “No legitimate investment salesperson should ever fail to clarify your past investment experience and risk tolerance before recommending an investment,” explains Todd R. Tresidder, the blogger behind the Financial Mentor. “A con man may skip this essential step in the sales process.”
See also: 11 Purchases You Should Never Make with a Credit Card
