How to think about risk in financial planning
A friendly game of Risk 2210AD by R.B. Boyer
License (according to Flickr): Attribution-ShareAlike License
License (according to Flickr): Attribution-ShareAlike License
(MoneyWatch) Bloomberg's Pimm Fox recently asked me how investors should think about risk. He wasn't referring to your portfolio going up and down. Instead, he meant how you address the outside factors that could derail your plan, even if your returns are better than you were anticipating. Here's how you should think about those outside factors. Investment gains and losses. Before we get into the other types of risk, let's have a quick review of the risk of gains and losses. When talking about your portfolio, there are two types of risk: For example, stocks are riskier than bonds. No matter how many stocks you own, you can't diversify away their risks. Because of this, stocks have to offer higher expected returns than bonds. Otherwise, investors would only invest in bonds. Why else would you take on risk if you weren't expected to be paid for it?
How to think about risk in financial planning
Additional Info:
FieldTerminology: stocks
Overall Sentiment: -0.147558
Relevance: 0.933822
FieldTerminology: inflation
Overall Sentiment: 0.121869
Relevance: 0.783866
FieldTerminology: Life insurance
Overall Sentiment: -0.531499
Relevance: 0.512383
Organization: Treasury
Overall Sentiment: 0.253258
Relevance: 0.607505
URL Meta Tags Details
URL Provided Keywords:
Provided Title:
Site Provided Desc:
Source : Click Here
- bam advisor services
- bam alliance
- bloomberg's pimm
- buckingham asset management
- diversified portfolio
- financial advisor
- financial crisis
- inflation risk
- larry swedroe
Provided Title:
How to think about risk in financial planning
Site Provided Desc:
Investment risks go beyond the daily ups and downs of the market, so make sure you're prepared for them
Source : Click Here
No comments:
Post a Comment