On The Agenda:
Are you someone who doesn’t mind riding the rollercoaster of investment ups and downs? If so, you are more of a risk-taker. But not everyone is. Today we’re talking about risk tolerance and how to figure out what your level is.
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Episode Show Notes:
What would you do if your finances took a bad turn? How much risk are you willing to take? Are you someone that can live through the rollercoaster, or do you say, “Oh no”?
No one can tell you how an investment portfolio will perform, so you need to have a well-defined loss line in the sand to help your advisor design your portfolio.
You can’t avoid downturns in the market, so you might as well determine how you’ll react to volatility.
Most people identify as moderate investors and like a little bit of conservative and a little bit of aggressive investing. For our clients, we use a tool that asks how you’ll react to ranges of volatility to see what kind of risk tolerance you can stand.
Sometimes, we have husband and wife clients with different risk tolerances. We want to make sure we’re not putting somebody into one of three risk models and moving on.
We want to be transparent and let clients see the financial moves that are being made. We design portfolios for what our clients want, and many of them are developed around different types of people and their preferences.
Listen to the full episode or use the timestamps below to jump to a certain section. Thanks for listening.
0:27 – What is risk tolerance?
3:42 – Determining your tolerance
5:50 – Different tolerances
8:00 – Annuity or fixed index
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