09/04/2024
In investment, it is always advisable to assess one's risk appetite before putting money into an asset where loss of the principal is likely.
Risk appetite is assessed in terms of how much of the invested amount you can afford to lose. Is it 10%, 50% or even 100%? The higher you can afford to lose the greater your risk-bearing capacity.
Failure to understand one's risk capacity can lead to immeasurable pain when investment risks materialise. For your peace of mind, always invest what you can afford to lose. But this is not a licence for taking excessive risks tantamount to gambling. Every investment is a gamble but gambling is not an investment.
