Something I've long been semi-ashamed of is my fear of risk. It plays out in a number of ways: I don't drive a car, I don't ride roller coasters, and, perhaps most detrimentally to my long-term happiness, I'm uncomfortable putting my money anywhere I can't see it.

As I've gotten older, I've gotten better about the latter (I still can't go on any ride with a drop greater than like, two feet), cautiously investing what I can and tentatively planning for the future. Part of my shame, though, has to do with the fact that money shouldn't be emotional in the first place, right? Shouldn't I be able to remove "feelings" from the equation altogether?

According to my colleague Emily Stewart, the reality is actually more complicated than that. Money, and particularly the risk thereof, always contains some element of emotion, she argues, and she's got an excellent piece about how to assess and navigate risk in your own life and finances (although, it should be said, neither she nor Vox can provide financial advice). I found it extremely helpful and even calming — not just because of the actionable, concrete framework for thinking she provides, but also because it made me feel less alone in my own contemplations.

—Alanna Okun, senior editor of The Goods

The stock market can be an emotional roller coaster. It shouldn't be.

illustration of hand reaching for money in an animal trap

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Investing can feel very good when things are going well. It can also feel very not good when things are not going well. Case in point: If you were investing (or, let's be honest here, speculating) in crypto in the fall of 2021, you probably were much happier with the situation than, say, if you were doing so in the summer of 2022.

Conventional wisdom goes that you're not supposed to factor in emotions at all when you invest, or at least you're supposed to try to keep your emotions out of them as much as possible. To the extent that's not possible for you, it's important to know, too.

Investing is inherently risky, no matter how supposedly safe or speculative the asset, and not everyone is equipped to handle risk equally. Finding the right risk-reward mix is a tricky balance. There's also a difference between risk capacity, meaning the risk you should take to meet your financial goals, and risk tolerance, meaning how much risk you can deal with emotionally. You don't want your retirement account to keep you up at night. You also don't want to keep your money in cash your whole life and then run out of money once you actually retire because you never invested it.

"Different people at different times in their lives and with different investments are more able to accept volatility," said Zach Teutsch, managing partner at Values Added Financial. Experts generally say younger people are better off in riskier investments, such as stocks, because they're better able to wait out a downturn than someone older and closer to retirement. But there's more to it than stocks vs. bonds vs. retirement date.

There is no surefire formula for determining how much risk you can and should take on in investing, and it's definitely not a one-size-fits-all situation. But as you approach investing — whether you're already in the market or considering it — it's absolutely something to keep thinking about.

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