Risk Aversion

There is a difference between an investor's willingness to take risk and his or her ability to take risk. Take the quizzes offered at the websites below and compare the results. If they are significantly different, which one would you use to determine an investment strategy?

http://mutualfunds.about.com/library/personalitytests/blrisktolerance.htmhttp://mutualfunds.about.com/library/personalitytests/blriskcapacity.htm

Market Crashes

See the http://mutualfunds.about.com/cs/history/a/marketcrash.htm site to get a historical perspective on the market crashes that have happened in the U.S. since 1900. When did the crashes occur? How long did each of the crashes last? How much value was lost in each crash?

What has the general trend of the market been since 1900? How do you feel about investing in the stock market knowing that you might experience one or more market crashes during your investing lifetime?