29th June 2023

Exploring Risk Appetite: Unveiling Your Investment Comfort Zone

Dive into the different levels of risk appetite – low, medium, and high – to help you discover your investment comfort zone.

When it comes to investing, understanding your risk appetite is crucial. It determines the level of uncertainty and potential gains or losses you’re willing to tolerate. As women looking to navigate the investment landscape, it’s important we assess our risk appetite and align it with our financial goals so we can make the right investment decisions for us.

Before we get started there are a few misconceptions around risk and particularly around women and risk that we want to highlight. It’s often said that women are more risk averse than men and this is one of the main reasons women don’t invest as much as men. We call b*llshit on this. 

What we see at Propelle is that women are more risk “aware”, not necessarily averse. So what’s the difference? We see that women think more about the details of investments and have lots more questions about them. They want clear and understandable answers to their questions before they’ll consider moving forward with an investment. That’s a good thing! 

We should all be doing our homework (aka due diligence) on investments before jumping in. Being risk averse means you just don’t like risk, full-stop, regardless of whether it may be suitable for you or not. Typically higher return investments carry higher risk and lower return investments carry lower risk. At the end of the day, risk and reward are two sides of the same coin – they come together. You can’t make an investment and expect a return without also being prepared to take on some level of risk. There’s no such thing as a free lunch… or free returns.

Now let’s dive into the different levels of risk appetite and key strategy characteristics that you could consider in each category. 

Low-Risk Appetite (Risk Averse)

If you have a low-risk appetite, you’ll likely prioritise capital preservation and prefer more stable and predictable investments with less volatility. (Volatility is how much the price or value of an investment moves around over a period of time. Low volatility investment values don’t move around much and high volatility investments values move around a lot). 

Investments which feel high risk may cause you uneasiness but that doesn’t mean you have to settle for low-return investment options either. Here are some key characteristics to think about of a low-risk investment strategy:

  • Focus on safety: Think of low-volatility investments such as government bonds. These investments provide a lower potential for significant losses but also tend to offer lower returns.
  • Diversification: Diversification helps reduce the impact of individual investment risks. With this strategy, you’re more likely to want to spread your investments across different asset classes, such as bonds, cash, and stable dividend-paying stocks. 
  • Long-term perspective: Having a long-term investment horizon (i.e. where you can invest money without needing to get it back in the short-medium term) means you are more likely to be able to withstand market fluctuations and volatility. So investments with higher volatility, which may not be suitable over shorter time frames, may be more suitable over a longer investment time period. E.g. For some, property investments fall into this category. Investing into property with a short-term time horizon may be considered inherently risky because property investments aren’t very liquid (meaning you can’t get your money out quickly if you need to). But if you have a long-term time horizon and you aren’t looking to get your money back soon, then property investing might be something to consider.

Medium-Risk Appetite (Risk Neutral)

A medium-risk appetite implies a more balanced approach i.e., seeking moderate growth while still considering risk management. Here are some characteristics of a medium-risk investment strategy:

  • Focus on balance: While you understand the need for caution, you’re also willing to explore opportunities that offer relatively higher returns. You’re seeking that middle ground between some risk, but not a lot and “ok” returns, but not great returns.
  • Diversification: With this strategy, you’re more likely to want to allocate your investments across a mix of asset classes, including stocks, some bonds, and possibly include alternative investments which typically seek to produce higher returns. (Alternative investments may include Property, Private Equity etc). This diversification aims to balance risk and return potential.

Long-term perspective: With medium risk a long-term horizon can suit you well as you have time to build up cumulative returns as time passes.

High-Risk Appetite (Risk Seeking)

If you have a high-risk appetite, you’re comfortable with volatility and willing to embrace higher-risk investments for the potentially substantial returns. Consider the following characteristics of a high-risk investment strategy:

  • Focus on Maximising Returns: This looks like prioritising capital growth and a willingness to invest in assets with higher market volatility, such as individual stocks, equity funds, or cryptocurrency or those that are illiquid such as alternative investments, like venture capital. You’re aware that you may lose some or in some cases all of your money and you’re ok with this, usually because you have done your homework on the investment and don’t think this is the most likely outcome and any losses with such an investment, when considering all your investments/ assets, can be accepted.
  • Higher-Risk & Alternative Assets: Your portfolio is likely to have a bigger portion invested in higher risk or alternative assets. You may actively trade or adjust your portfolio to capitalise on short-term market movements and potential opportunities. Typically, higher risk strategies require a deeper understanding of market dynamics, more in depth knowledge of the investments and in some cases regular monitoring.
  • Long-Term Perspective: While accepting short-term volatility, you’ll likely maintain a long-term perspective, so that you have the ability to ride out market fluctuations and benefit from the potential high returns associated with riskier investments.


Understanding your risk appetite is essential for making informed investment decisions that align with your financial goals. Whether you’re risk-averse, risk-neutral, or risk-seeking, there are investment strategies available to suit your comfort level. 

A point to note is that a long-term investment horizon is required regardless of your risk level. A general rule of thumb is that investments should be made for a minimum of 5 years to minimise the risk of high fluctuations. Remember to regularly assess and reassess your risk appetite as your financial circumstances and goals evolve. 

As always, feel free to connect with the women in the Propelle network so you can learn from each other’s personal experiences!

Disclaimer: The information provided in this article is for educational purposes only and should not be construed as financial advice. It is important to conduct thorough research and seek professional guidance before making any investment decisions. Propelle does not provide investment advice. If you are unsure about anything, please seek financial advice from an authorised advisor. Your capital is at risk.