When you began investing, you likely chose an investment portfolio model that aligned with your risk tolerance and time horizon. But since the financial markets are dynamic, the different investments in your portfolio will gain or lose value as different asset classes have good or bad years. This means that, little by little, your portfolio could inch away from your ideal asset allocation and you may be taking on more risk than you’re comfortable with, or maybe not taking on enough risk. When was the last time you looked at the contents of your portfolio? Is it time to reevaluate?
Does Risk Really Matter?
Think about it this way. You have goals you want to accomplish—everything from leaving a legacy, traveling, building your dream home, to living comfortably in retirement. If risk isn’t taken into account when creating your investment strategy, you could fall short of making your dreams a reality.
You don’t want that, and we don’t want that for you. That’s why we work backwards, calculating the annual return your money needs to earn so that you can aim to reach your financial goals. We want to maximize your money, yes, but not in a way that jeopardizes your financial well-being. By determining your risk tolerance, we can help stabilize you from the downside when markets are struggling and take advantage of gains when markets are up.
Anticipate Your Limit For Risk
One thing we know for sure is that you don’t want to figure out your risk tolerance accidentally. For example, you don’t want to go on an intense cycling trip through the mountains, reach the peak, and then be overcome with fear at the steep descent. At that point, it’s too late. You have to get down somehow. Similarly, you don’t want to get within 5 years of retirement and realize that you didn’t receive enough of a return on your investments to carry you through your retirement years.
We have created a risk tolerance questionnaire that will show you how much loss you are comfortable with. With all the volatility in the market right now, it’s an ideal time to figure out how much risk you can tolerate going forward and then align your investments with your risk level. It’s a way to give consistency and direction to your financial plan.
Fill out the questionnaire today!
We Can Help
Knowing your risk numbers helps us guide you toward a portfolio you can hold fast to when the road gets rough or when permanent loss stares you in the face. Our goal at Nichols Financial Strategies is to help you discover your risk limits before you’re overcome with fear and tempted to panic. Fill out the risk questionnaire to find your personal risk number so we can help you work toward your dreams while protecting your money. Reach out to us at 559-440-6999 or by email at matt@nfstrategies.com with any questions or concerns.
About Matt
T. Matthew Nichols is founder, CEO, and wealth advisor at Nichols Financial Strategies with more than 20 years of experience in the financial industry. He spends his days serving business owners and families, specializing in helping those in the agriculture industry proactively prepare for the unique challenges they face in a rapidly changing economy. Matt holds his FINRA Series 7 and 63 securities registrations with LPL Financial and his California State Life & Health Insurance license. He’s also pursuing his ChFC designation and is dedicated to continuing his education and staying abreast of the latest financial trends and strategies. Matt’s mission is to help his clients transfer wealth from one generation to the next and work towards achieving their goals so they can spend more time on what they love most. Matt was born and raised in the California Central Valley and resides in Fresno with his wife, Christy, and their two daughters, Holly and Jillian. He enjoys golf, traveling, skiing, and spending quality time with his family. To learn more about Matt, connect with him on LinkedIn.