Risk is everywhere.
All I have to do is turn on the news to be reminded of that.
I think it's easy to go about our day-to-day lives and forget that bad things can happen – until suddenly they do.
Speeding down the highway. Smoking cigarettes (or anything else). Driving after one too many drinks. All of these are examples of risky behavior. Could you do it and be fine? Maybe. But each of these behaviors carries an element of risk of harm to yourself and others.
The sad truth is that risky behavior sometimes ends in tragedies – some worse than others.
And sometimes, we don't even realize how much risk we're taking until something unexpected happens that changes how we think about what we're doing.
The truth is, whatever you do in this life carries a degree of risk.
But there's another side to this coin.
Benjamin Franklin is credited with saying, “Nothing ventured, nothing gained!”
That's true. I get up in the morning and work hard because I believe and hope that I can make a difference in the world. I take risks, just like you do – and that's okay.
And when it comes to investing, believe me, there's a lot at stake.
It's possible that your retirement may last not 10, not 20, but 30 years. Think about it. Life expectancy in the United States is going up; that's a good thing, but you better have some dough in your portfolio before you can't work anymore.
One might be able to – barely – live on Social Security benefits right now, but if you're years and years away from retirement, you surely don't want to count on the government to solve your financial woes.
It's better to have a plan.
And yes, that plan will come with a serving of risk – whether or not you dish up a generous helping of it is up to you.
The Former Difficulties of Assessing Risk Tolerance
Here's the all-too-common scenario that played out in my office.
I'd sit down with a new client and we'd discuss their risk tolerance. I'd simply ask something like, “On a scale of one to ten, how much risk do you normally like to take – ten being a lot of risk and one being very little risk.”
The problem is that not everyone has excellent self-reflection capabilities and sometimes, in real-world scenarios, the way they behave differs from how they thought they would behave.
That's troubling, because if I put a person's money in risky investments – investments that have a high potential to do very well or very poorly – and they actually can't stomach that risk and pull out of the market early because of a drop in value, they'll probably lose money permanently.
Conversely, if I put a person's money into stable investments and they don't see the results they're after, they might choose to walk out the door.
More from GFC, Below
So the question is, how can I get past what people think they know about themselves and to the core of who they really are? How can I determine their true risk tolerance?
It eluded me for years. Thankfully over time, I've gotten much better at objectively assessing my clients' risk tolerance – but a new tool I recently found is taking my ability to a whole new level.
The Simple Way to Find Out How Much Investing Risk You Can Stomach
It's called Riskalyze, and it rocks.
In a nutshell, Riskalyze measures your degree of risk tolerance using carefully-chosen questions and gives you a Risk Score. The higher your Risk Score, the more risk you're willing to take.
And here's the cool part: it only takes less than two minutes to get your Risk Score.
Oh, and did I mention it's free?
Your Risk Score can be used to compare your risk tolerance with your current portfolio. And guess what? We're happy to do that for you – no charge there, either.
I encourage you to grab your free Risk Score and complimentary Retirement Map Analysis.
If you ever have questioned if you're on the right track with your investments, take this opportunity to find out. It is by far the easiest method I know of to get the information you need to make the very best investment decisions.
In the report, you'll learn the following (and more):
- How long your nest egg will last
- How risky your portfolio is
- How inflation might impact your retirement plan
- How buying a second home would affect your retirement goals
- How conservative or aggressive your portfolio is
- How likely you are to have the ability to retire by a certain age
- How your current savings rate will affect your retirement
Ironically, you can avoid taking bad risks by finding out your Risk Score. Should we find that your portfolio doesn't align with your retirement goals and risk tolerance, we can help find the right investments for you.
Many times, we're taking risks and we don't even know it. I've seen people take huge, unwise risks simply through inaction.
Remember, what you don't do can be just as risky as what you actually do.
But one thing is certain . . . .
There's nothing wrong with gathering information and looking at the facts.
Should you find all is well, great! Should you not, we'll give you a plan.
Wanna see how this works? I created a short video here that will walk you through exactly how Riskalyze and the Retirement Map Analysis operates so you know what to expect. No gotchas – just free, customized information so you can make the best investment decisions for you and your family.
And hey, if you decide you need some help with your portfolio, we're always happy to offer assistance.
Ready to Get Your Free Risk Score?
Just click to button below to begin the process. After you complete this very short questionnaire we'll need to get a bit more info to complete your personalized Retirement Map Analysis.
Either click the button above or you can click HERE to get your free Risk Score.