Today's topic is risk, and what it means to you! It seems that, over time, our industry has developed a culture of using words that make big assumptions. The assumption is that we define and understand these words the same way. A good example is the word "risk." Does it really mean the same thing for everyone?
Risk has to do with volatility over a period of time. This means that where there is a risk of loss, there is also an opportunity to gain. People need to realize that risk is personal; it can't be defined in a textbook. The goal is to always remain pragmatic and follow the plan that you personally have put in place.
Risk could come from not having an advisor or a relationship with someone who can offer objective advice. When the volatility comes, risk often affects people's decisions, which can result in decision making that is based on emotions rather than reason. To avoid this, every investor needs to understand what their definition of risk is.
To understand what risk means to you, a great strategy is to write down your own definition. More importantly, it's important that you sit down with your advisor regularly to better understand what risk is to you, how you want to handle it, and how your team is working with you on your personal risk, your goals, and the amount of risk you're willing to take
Bottom line: Every investor should sit down and review what risk means to them. Risk is ever-evolving, as your portfolio, investments, and needs change. If it's been a while since you sat down with someone to review what risks you're willing to take when investing, give me a call or shoot me an email. I'm always available to help you identify the best investment strategies.
