How can investors change risk profile from time to time within their investment journey? Nirav Karkera answers

economictimes.indiatimes.com:

«Generally in common parlance when we talk about an investor's risk, we refer to it as a risk profile. But very seldom does a person realise that the risk profile is made of two important components, that is, an individual's risk-taking ability and risk-taking willingness,» says Nirav Karkera, Head of Research, Fisdom.A very important practice which an investor he himself or herself should be doing even before approaching anyone or even a professional to get a help from for their financial planning or their investment portfolio. This is a very important part of your homework that you as an investor should be aware of and when we talk about investor profile personalities, we are usually talking about the risk profile that they carry so that it gets easier for them to understand the kind of investment options that are available for them or they match or the ones that match with their profile. So, what kind of investor profiles are we talking about over here? A person who just cannot take risk, who is risk averse; a person who is very aggressive in nature when it comes to risk. Is it all related to risk?Yes, so there are a variety of ways in which one could classify risk profile or rather an investor profile.

But yes, whenever we are talking about investing, risk becomes a part and parcel of this entire conversation albeit a very integral one. So, a lot of classification rests on the premise of the risk-taking ability and willingness of an investor.

So, generally in common parlance when we talk about an investor's risk, we refer to it as a risk profile. But very seldom does a person realise that the risk profile is made of two important components, that is, an individual's risk-taking ability and risk-taking willingness.