Monthly Archives: June 2011

We often talk about risk tolerance as though it were an upper limit on a negative, something like a pain threshold. But risk, in and of itself, is not necessarily a bad thing. Think about a rollercoaster: some rides can … Continue reading →

Many studies have shown that risk tolerance correlates positively with income and wealth. The correlations are not strong, usually around 0.3, but they seem to be universal. There is a temptation to think that higher income and/or higher wealth lead … Continue reading →