A part of the allocation equation that few people can afford to ignore. So the higher your bracket, the more assets we recommend shifting into equities. The more you need, the more we recommend you allocate to fixed-income investments. How you feel about the economy and the stock market. The more optimistic you feel, the more you should put into stocks.
Many people tend to overestimate their tolerance for market volatility.
If the answer to any of these questions is yes, you may want to set your risk tolerance no higher than medium. Hearst Communications Inc. MoneyMinded Limitation of Liability and Privacy Policy .