I want to share the mental model I use for thinking about investment risk that's more useful than the standard questionnaires.

Instead of asking 'how would you feel if your portfolio dropped 20%?' ask: 'If your portfolio dropped 30% tomorrow and took 18 months to recover, would you be able to avoid selling any of it?'

The answer depends on practical factors more than emotional tolerance:

• Do you have an emergency fund that covers your near-term cash needs without touching investments?
• Is your income stable enough that you won't need to sell investments to cover living expenses?
• Are any of these investments earmarked for a near-term goal (house purchase, tuition) that would force a sale during a downturn?

If you can answer yes to all three, your risk capacity is high regardless of how anxious a market crash makes you feel. If any answer is no, the practical risk is too high regardless of your theoretical tolerance.

Risk capacity — practical ability to hold through a downturn — matters more than risk tolerance — emotional willingness to watch numbers fall.