New Delhi, June 27 -- Many investors believe they have a high risk appetite when markets are rallying. But the real test comes during sharp market corrections, when panic often leads to premature selling.

Experts say investors should assess both their financial capacity and emotional ability to withstand market volatility before deciding how much risk to take. Understanding your true risk profile can help you avoid costly mistakes during market volatility.

So, let's understand the clear process of finding risk appetite and how to create a portfolio accordingly.

Begin by evaluating your financial position, including income stability, emergency savings, insurance cover, liabilities, existing wealth and dependence on investment income. Th...