Sleeping with Risk
Some personal thoughts on finding your risk/return sweet spot
Hey Investors
This weekend, I was running an options training session with five fantastic people. Each of them came to the course for different reasons and with their own unique goals. As we worked through exercises, one thing really stood out: how different everyone’s expectations of returns and tolerance for risk truly are.
Risky tomfoolery or normal Stag-do shenanigans? All in the eye of the beholder.
When students presented their stock research and explained the rationale behind their picks, the differences were striking. Some were targeting monthly returns of around 9% from options strategies and were thrilled with that. Others were happy with 1.5–2% per month, and they were equally comfortable with that. The common thread wasn’t the specific number they were aiming for—it was that the return fit their personal strategy, aligned with their goals, and most importantly, allowed them to sleep well at night.
That last part is critical. If you can’t sleep at night because you’re worried about your positions, it doesn’t matter what the return is on paper—you’re taking too much risk for your comfort level.
The reality is that risk tolerance is deeply personal. Just because you see someone on YouTube claiming to make 200% per year doesn’t mean you need to—or should—aim for the same. Performers like that are rare, and even when they do have extraordinary years, markets have a way of humbling everyone eventually. Very few traders or investors can sustain these monster sized gains year after year.
Instead of chasing someone else’s benchmark, you need to find the rate of return that fits you. If 2% a month is sufficient for your goals, then that’s the right number. If 9% a year using exclusively ETFs is your sweet spot, then get after it. If your knowledge, strategy, and financial situation mean you’re comfortable aiming for higher returns, and you’ve built safeguards into your approach, that can work too. The important thing is that you’re playing within your own risk boundaries.
There’s also no universal rule about how much risk you should be taking at a certain age. Society often suggests that younger investors should be aggressive while older ones should become conservative. But life circumstances, financial education, and personal temperament matter more than broad rules. Some people in their 20s prefer conservative strategies, while others in their 60s feel comfortable taking on more risk because they’ve built the right safety nets.
At the end of the day, these are just my own thoughts and observations from teaching and trading. Everyone’s risk tolerance is different—and that’s exactly the point. If you’ve found the return that fits you, your goals, and lets you sleep peacefully at night, then you’re already winning.
👉 Want to build an options strategy that fits your lifestyle, goals, and risk tolerance? Join the waitlist for my Lazy Formula Options Trading Course—next intake is coming November (or maybe December). Email me at andy@60secondstofire.com or message me with “Course” below to reserve your spot or send me a messages
Cheers
Andy
Valencia
I can’t get enough of the parks here. Valencia you amaze me!