by Jacob Sturgill, CFP®
So Britain is leaving the European Union, the world is once more altered, and a new word has joined the English language. By now, you’ve probably read lots of commentary, either positive or negative, on the impact of Brexit. We aren’t going to do the same. Why? For one, we can’t predict the future and don’t know what the long-term impact will be, and secondly, what happens in Britain, China, Greece or any other country is really not relevant to you. This is not to stay that Brexit and other world developments will not result in shocks to your portfolio, because they will. However, there is something more paramount that you need to pay attention to at this moment and it is RISK.
Risk is more complex than just determining your comfort level with your investments in volatile times. Like changing headlines, your personal risk tolerance changes over time, as does the risk of your portfolio. An investment made two years ago may have been appropriate for your risk tolerance then, but does it match your risk tolerance now? Outside of your personal risk tolerance, investments themselves change and with them their risk. So if risk is constantly in flux, how can we properly evaluate, identify, manage and monitor your risk and the risk of your portfolio?
New technology has been introduced that enables us to more closely evaluate your risk and the risk of your portfolio.
Here’s our process:
- Step 1: Identify Your Risk Number
Our online assessment quickly identifies your personal risk number. You can access our online assessment right on our website at pswealth.com.
- Step 2: Determine What You Can Expect from Your Portfolio
Our analysis provides deeper insight into the amount of volatility we can expect from your current portfolio.
- Step 3: Ensure Your Portfolio is Appropriate Considering Your Personal Risk Number and Other Suitability Factors
If your portfolio doesn’t seem suitable to your personal risk number, the expectations of your portfolio may be less likely to be met, and new developments in the world may have a greater impact on your investments.
Now is not the time to worry about Brexit. After all, the British are likely not worried about you or me. Instead, focus on risk and getting your personal risk tolerance properly aligned with your portfolio. Then the world can go on changing without any bother from us.
All investing involves risk including loss of principal. Securities and advisory services offered through LPL Financial, a registered investment advisor, member FINRA/SIPC.