Editor's note: This is a special excerpt from
Taming That Animal Called RiskOnce you stare
1. How Much Risk Can I Handle?Only as much as you're comfortable losing. Take on too much risk, and you'll panic, selling at the worst possible time. When's that? When you sell low, which is the opposite of tried-and-true investing smarts -- buying low and selling high. Ask yourself: How much am I comfortable
5% or less? You have a lowLet's assume you have $10,000 to invest (see
tolerance for risk. 6%-15%? You have a moderate tolerance for risk. 16%-25%? You have a high tolerance for risk.