Online Risk Analysis
Investing is risky. It’s just the nature of the beast. Some risks are avoidable; some are not. Avoidable risks are those that occur when your portfolio leans too heavily on stocks or bonds that have been unstable in the past or when your holdings are not diversified appropriately. For example, you may be putting too much of your company’s stock in your 401k plan. Or you may have an overabundance of overlapping U.S. stock mutual funds instead of being more globally diversified. Avoidable risks often occur when we underestimate risk and believe we can tolerate more than we actually can.
On the other hand, unavoidable risks are those that occur because our world is ever-changing, volatile, and we can’t predict everything. As much as we wish they weren’t, unavoidable risks are simply out of our control. This type of risk includes unfortunate events like geopolitical issues and terrorist attacks.
The third category of risk is often unseen, but it can impact your portfolio just as intensely as an obvious risk: the risk of being too conservative and not achieving your future goals as a result. By overestimating risk and trying to avoid loss at any cost, you could be unintentionally sacrificing your future dreams.
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Research shows that four out of five investors have more risk in their portfolio than they realize.* This excess of risk can subject you to greater losses in market downturns. Risk is different for every person based on their unique situation, stage of life, and personality. It is important to understand your personal risk preference so that you can ensure that your portfolio is in line with it and you aren’t caught off guard. Do you know your risk number? Check out my online risk assessment tool to see where you stand today!
Once you know your unique risk number, it’s time to make sure your portfolio reflects your risk level. Take the first step and reach out to me at (949) 221-8105 x 2128, or email me at firstname.lastname@example.org.
*Research by Riskalyze, LLC
Diversification helps you spread risk throughout your portfolio, so investments that do poorly may be balanced by others that do relatively better. Neither diversification nor rebalancing can ensure a profit or protect against a loss.