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How I Minimize Risk for my Clients

Posted by Shanna Tingom, AAMS® on Sep 7, 2017 3:22:16 PM

If you don’t like risk, you’re not alone! In fact, I ask my clients to complete an online risk assessment prior to our first meeting. While you may have to assume some risk in order to create enough wealth for your future, as your financial advisor, I want to understand your attitude toward risks and investing.

Most of us tend to dislike risk; it is human nature.

We’ve worked hard to get to where we are today so we want to be cautious of how and where we’re saving, spending, and investing. However, being too safe when you invest may hurt you in the long run. As a consequence, you could even end up with a retirement savings shortfall.

We can minimize risk through investment strategy.

Once I understand your attitude about risks and investing, we can minimize risk through investment strategy that takes into account where money is invested, inflation, and timing of investments.

Inflation is the hidden threat to your quality of life in retirement.

Even moderate inflation reduces the value of a dollar over time. The impact of inflation demands investing in things that have the potential to increase in value over time.

Equities such as stocks and mutual funds have the potential to out-earn inflation.

The dilemma about investing conservatively is that you can be too conservative.

You want a portfolio return that can keep up with or outpace the rate of inflation.

Slowly but surely, inflation makes a dollar worth less over time.

With interest rates being so low right now, your rate of return may be very low or minimal if you keep your invested assets out of the market, because stocks can return 10-15% (or better) in a good year!

As a financial advisor, it’s my job to minimize risk for my clients.

To do this I’ll have you take a quick online quiz and I’ll talk to you (and if you’re married, your spouse) to determine the level of risk you both are comfortable with.

Have you heard the phrase that opposites attract? In my experience, it’s not uncommon for one spouse to have a much bigger threshold for risk than the other, especially when it comes to investing. Don’t worry. I will help you navigate talking to your spouse about money, investing, and all of the risks involved, not just the risk of your investment fluctuating over time.

It’s my job to put risks in perspective for you and to minimize risks in your portfolio.

If you’re interested in learning more, make an appointment with Shanna Tingom at Heritage Financial Strategies at 480-397-1184.

Find Out If You Are Prepared For Retirement