Successful investing isn’t easy. In addition to having a basic level of financial competency, successful investors must also exhibit a high degree of discipline and emotional control. Without all three of these characteristics an investor’s returns are likely to disappoint. After all, one can be as financially astute as Warren Buffett or George Soros; however, [...]
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The markets have been in a sustained rally since hitting the March lows. Since that time, the S&P 500 has climbed more than 50% from the bottom. While we’ve seen some noticeable improvement in the economy since than, there are still many ominous signs that make me weary. Firstly, second quarter earnings were largely viewed as [...] The historic drop in the markets that has taken place over the past year has even the most seasoned investors shaken. Very few investors have ever seen a bear market of this stature during their investing careers, and one has to wonder whether overall risk tolerance has changed for good. Personally speaking this bear market [...] Keep It Simple Stupid In my previous post about asset allocation I talked about how important it is to have a diverse mix of investments that match your risk tolerance and time horizon. I also explained that it is necessary to shift this mix of investments into less risky assets as you get closer to retirement. For [...] Cramer’s Panic Cramer On October 6th Jim Cramer the host of CNBC’s “Mad Money” appeared on The Today Show and told investors, “Whatever money you may need for the next five years, please take it out of the stock market right now, this week. I do not believe you should risk those assets in the stock [...] |
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Composure: The Key To Risk Tolerance
I’ve already mentioned in a few posts that it’s vital to have an asset allocation that matches your time horizon and risk tolerance. Figuring out your time horizon is simple enough, but things get a little more difficult when it comes to assessing your risk tolerance. Some advisors will point you to a standard questionnaire that is suppose to [...]