An individual investor's profile is determined by the following:
Financial goal and Time Horizon
An investor's financial goals and time horizon have a bearing on their risk tolerance level. Generally, critical goals and/or short time horizons (e.g. less than five years) may dictate a more conservative approach. On the other hand, a less critical goal and/or longer time horizons may accommodate a more aggressive approach since they have sufficient time to recover from short term drops in the asset values.
Financial Situation
A larger income and asset base may allow you the flexibility to take more risk because you have a greater ability to recover from underperforming investments. However, some investors with large assets may prefer to take a more conservative approach since they do not feel a need to take on extra risk to meet their goals.
Personality
Some people's personalities often predispose them towards more or less risk-taking than others.
Experience With Investing
Some people have experience investing and therefore have an appreciation of the risk-return characteristics of different asset classes. More experienced investors often have the ability to take on risk since they have a clear understanding whereas inexperienced investors may be better off holding relatively conservative portfolios given their limited understanding of investments.