Have you asked yourself this question? Sadly, it is one thing that all do it yourself investors fail to include in their portfolio ‘s and not well understood by the rest of investors. Advisors normally ask that you fill out a risk tolerance questionnaire and then your answers are given a score. That score is then used to determine what portfolio model is best suited for you. The score is reflective of the just how much risk your portfolio can handle, but not necessarily what you feel when your turn on the news.
What we see quite often through our comprehensive planning and modeling is most people are invested too aggressive. By reducing the overall risk (volitivity), it increases the chances of success in your retirement plan. We can look at the historical drawdowns of a portfolio and illustrate what would happen in a down market cycle and show you what could happen under various market cycles. This not only helps you better understand your risk but the risk of the portfolio and how it impacts the goals you have going forward into retirement.
The do-it-yourself investor has no way to evaluate his own feelings of risk and cannot structure a portfolio in a manner that is reflective of his true risk. We see this constantly, selling completely out at the bottom and buying at the feverish peak. And studies that bear this out. In an attempt to outsmart the market and the financial professionals, lots of money is left on the table, and good opportunities are missed.
Given the current market cycle of record high inflation, geo-political risk at home and abroad it makes sense to work with a seasoned professional. Not only will this help meet your retirement goals but just might help you sleep a little better each night.
Mike Mickels is the President of CochranMickels Retirement Specialists and an avid sporting clay competitor. CochranMickels Retirement Specialists provides personalized planning and investment services to individuals approaching and in retirement. They also provide retirement and benefits training to Federal employees
Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc, a Registered Investment Advisor. CochranMickels and Cambridge are not affiliated.