Your financial professional may share a risk tolerance questionnaire to help design an investment portfolio that aligns with your preferences and risk capacity. During periods of market volatility, you’re more likely to stay the course if your investments reflect both your emotional comfort and financial situation.  

Yet risk tolerance is only part of the story. Risk perception—how risky something feels—is an often-overlooked factor that drives financial behavior. In this article, you'll explore how our perception of risk shapes decision-making, and how behavioral blind spots can distort that perception.

What is the difference between risk tolerance and risk perception?