Category Archives: Risk Tolerance

Traveling for Knowledge

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Active Management Conference

I just returned from speaking at a conference in Dallas, Texas last week, hosted by the National Association of Active Managers ‘ (NAAIM).

Yesterday was a tough day to be in stocks

Copyright (c) 123RF Stock Photos

Copyright (c) 123RF Stock Photos

In case you didn’t notice, stocks tumbled yesterday, bringing the year-to-date loss for the S&P 500 to around 5.65%. On days like this you can learn some important lessons on investing. The first is to remember that you should have a balanced portfolio and understand how much your portfolio will move up and down under certain scenarios. A balanced portfolio means you own some stocks, some bonds, maybe some real estate, as well as other asset classes, etc. By owning different types of investments that are non-correlated, which means they move in opposite directions, you have a better chance of holding through rough markets like today. The second is that we never know when these tough days are going to come, so you have to prepare for them in advance. Lastly is that you should analyzing your risk tolerance and invest in the investments that will match the volatility your comfortable with.