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Risk Profiling is for the Self Examination

 Risk Profiling is for the Self Examination Before starting any investment, it is a good idea to test yourself. Self Examination, which can be called Risk Profiling has 3 Stages. Risk Required Risk Capacity Risk Tolerance For example, suppose your are going to invest in the Equity(Stocks) Market. We know that the Stock Market is generally a high Risk investment product. Market Volatility is high in the short term is guaranteed in the Equity Segment. We cannot avoid this. This is what we call as Market Risk (Required risk).  Only by understanding these type of requirements, we can balance in the Investing of Equity. However we would generate better returns in the long run.  The Second risk is your Risk Capacity. This position will tell you that whether you have enough capacity to handle the risk or risk involved when investing in the Stock Market. Here we can find out how much you are going to invest and ensure about your Family will suffer financially if there is a loss in the Market.