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JANUARY 2019 | NEED TO KNOW BASIS

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WHAT YOU SHOULD KNOW

A topic of confusion for many investors is how to implement a successful risk strategy (a.k.a. an investment risk management plan).  "Risk Tolerance", as it is often termed, is a moving target.  Our understanding and implementation of appropriate risk management varies with our stage in life; our needs (and wants) and even our mood when we see a gain or loss in the value of our assets. 

Investors want to maximize gains and minimize losses.  They also want their cake and to eat it too. In practice, doing so is only possible when, as the adage says, we "buy low and sell high". 
But investors often feel awful when prices go down and their assets are worth less than before (i.e. the price is low).  And investors typically feel great when their assets are worth more than before (i.e. when the price is high). 

Our feelings can betray us when it comes to understanding and implementing our investment risk management strategies.  We want what we want and not a penny less! 

So how does an investor see risk from a rational perspective, without getting too depressed or too giddy? 
How does one grasp the level of risk one is really comfortable taking on? 
How can we use reason, confidence and planning to our advantage when implementing an investment risk strategy?

Just so we are clear -- there is no one perfect tool! Our investment whims and fancies can't be tamed all at once. We're financial advisors, not miracle workers. But we do have a great tool to help you figure out your "risk threshold".  
This tool is fast, easy to use and packed with data!

WHY YOU SHOULD CARE

 WHY YOU SHOULD CARE SO WHAT DOES RISK AND THE CURRENT STOCK MARKET HAVE TO DO WITH ME? 


You should care about market volatility if you own investments. That includes 401Ks, IRAs, annuities, bonds stocks, real estate, private companies and a wine collection.   


You should also care because markets have ups and downs and the way you respond or react to those ups and downs can make or break you. Staying with your risk game plan is a good way to get the emotion out of your investment portfolio.  Knowing your risk tolerance ahead of time is crucial for when the market dips and you find yourself  worried!   

Also, if you have family members or friends that are constantly freaking out about the ups and downs of the stock market, you should care enough to tell them there's a better way to live. Share this newsletter with them so they can check out this easy way to figure out their risk threshold. 

WHAT YOU SHOULD DO

WHAT'S A SMART INVESTOR TO DO? 

When markets drop and the water cooler is abuzz with talks of government shutdowns, Dow crashes, a 2008 repeat and the housing market going down in flames, what do you do?   How do you react?  We know that sometimes our co-workers, family and friends can make even Christmas seem like a disaster, and most of us try not to freak out. But for a lot of us, we will find ourselves thinking about our investments much more than is normal. Did we put it in the right place? Is it safe? How low is too low? Should we sell now and cut our losses.   Do we hold out in case the apocalypse doesn't happen.  Is this the very best time to double down?   ENTER Riskalyze. We use this tool in the asset management part of our business and it's great! Riskalyze helps clients decide, ahead of time, what sort risk tolerance they hold.  


You take a short 5 minute quiz and capture your risk tolerance to see if your portfolio fits you.  The quiz just needs your name and email address to get started. Then you will let it know what your goals are. Wealth accumulation? Retirement savings?  Debt reduction?  Simply enter your current goal and move along, letting the quiz know any other important information you have in your head. Then you add how much you have saved right now for your goal(s).  You don't need to worry, if you don't have much or any at all, Riskalyze doesn't judge and neither do we.  Last you enter your current age and desired retirement age and viola!  

You get to choose how comfortable you are with risk over the next 6 months. You get to adjust it and can always revisit it.  If you want to see projections out further,  we can even send you an analysis that goes way beyond 6 months.  


So, when the water cooler stories start flying you can stay grounded knowing how far you're willing to go with the latest up or down market.  When the news gets louder and you want someone to talk to about your risk plan, no matter if it is to take on a little more or less risk, call us. We will walk you through your stuff, analyze  your numbers and portfolios, and help you obtain some peace of mind.   

In the end you may thank your co-workers for their pontifications - they may still want to predict the apocalypse, but at least your portfolio will be the way you want it to be.   


You CAN use our riskalyze tool for FREE and start your path to fear-free investing. 

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