Broker Check

Portfolio Risk Analysis

How much risk are you taking with your investments? 

When it comes to your investments, your money and your financial goals, managing the amount of risk you are taking is critical. Like driving a car, you don't drive everywhere at one speed all the time. You adjust your speed to the conditions of the road, traffic, etc. So wouldn't it be wise to understand the risk to your investment portfolio?

    Are you taking too much risk? 
    Are you taking too little risk? 
    Are you taking the right kind of risk? 
    What should you do to better manage your risk?

All excellent questions and a smart first step is to know if the amount of risk you are taking is right for you. We invite you to take a short assessment at no cost and learn your own personal risk number. We will then follow up with you and discuss what may make more sense for you and your financial goals. 

Background: Over the years, we have searched and reviewed many Risk Tolerance Questionnaire's offered by different financial service companies. All too often we find vague terms such as “sometimes agree” or “partially disagree” that leave investors unimpressed. Some go further by adding technical jargon and industry buzzwords that leave many investors even more confused and unsure about the “right answer”.

We use a process built on Prospect Theory, the academic framework that won the Nobel Prize for Economics. Prospect Theory is a behavioral economic theory that describes the way people choose between probabilistic alternatives that involve risk. This customized process helps the investor determine their own tolerance for risk by using actual numbers and weighing their own personal reaction to different potential outcomes.