Two investors can hold identical portfolios and feel equally comfortable with market volatility while having very different capacities to absorb losses. This guide explains the difference between risk tolerance and risk capacity, and how time horizon, withdrawals, income, liquidity and portfolio dependence should influence how much investment risk you actually take.

How much of your portfolio should be invested in stocks versus bonds? This guide explains how each asset class affects growth, stability and portfolio risk, why there is no universal ideal allocation, and how to choose a stock-bond mix based on your investment horizon, withdrawal needs and financial circumstances.