Must-Read: Can You Handle Financial Risk?
The one bit of advice that everyone gives, and everyone knows, is to diversify that portfolio of yours. And that makes sense, seeing as you don’t want to put all of your eggs in one basket. But beyond that, everyone kind of just shuts up and quits with the advice. Instead, the next question that needs to be asked — and it rarely ever is — is how much risk you can take when you’re making your purchases. Not necessarily risk in an actual way, but risk you can actually stomach without losing all of your hair and forcing you to down booze just to take off the edge. Financial investing is not, after all, for everyone.
So today we’re heading on over to Good Financial Cents where they have a blog about how to find out how much financial risk you can actually take before wanting to crawl into a hole and die. They’re doing it by offering a free service called RiskScore that actually determines how much risk one of their clients is willing to accept. Why are they doing this?
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.
If that sounds right to you, then head on over to the link above and check out the rest of the post and figure out if the product is right for you.
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About Rick Mosely Rick is the editor for TSB magazine.