Risk Tolerance – Determine Your Comfort Level When Investing
Investing and risk go hand-in-hand. There’s really nothing you can do about that. What you can do is understand your personal risk tolerance. Knowing your comfort with risk is especially important when investing for retirement through your 457(b) deferred compensation plan.
How much risk should you take?
Changing market conditions may cause fluctuations in the value of your account. Also, the amount of risk you’ll face will depend on the type of fund mix, or asset allocation strategy, you’ve selected. When deciding your asset allocation strategy, try to strike a balance between potential returns and potential risk. You may want to choose a fund mix based on where you are on the path to retirement.
Knowing how many years you have until retirement is important because it indicates the number of years your money will remain invested. If time is on your side, you may want to be more aggressive with your investment strategy. As you get closer to retirement, you may want to adjust your fund mix to more conservative investments.
How to figure out your investment style
If you want to see what kind of an investing style you may have, take a few minutes to go through the My Investment Planner. You’ll answer a series of multiple-choice questions that may help you determine the level of risk tolerance you’re comfortable with.
Risk management — our strength
At Nationwide, we know how to manage risk. In fact, our risk management capabilities have been rated as “strong” by an independent rating agency, Standard & Poor’s, placing us in the top 14% of insurers.1
Get the help you need
Talk with a Retirement Specialist for more information on risk tolerance. Information provided by Retirement Specialists is for educational purposes only and not intended as investment or legal advice.
1RatingsDirect report, “Nationwide Mutual Insurance Co. Intercompany Pool,” Standard & Poor’s, October 8, 2008, reaffirmed July 8, 2011.