Risk Tolerance is a Marketing Term

It’s common to hear that if you want to get more reward you have to take on more risk. For example, your advisor (robot or human) tells you that, according to goals you want to achieve, you should invest in a basket of assets and expect to receive a certain return. How far someone is willing to deviate from the norm is packaged up and explained as “Risk Tolerance”. 

Risk Tolerance is a marketing term designed to make the investor feel like there is a spectrum where they can invest and feel “comfortable”.  

You might be able to feel some level of comfort with your investments, but that comes from understanding the investments themselves, not from a program assuring you that you invested within your appropriate tolerance for risk.