Do I Feel Lucky?

If you like to golf then you Do Not want to play with my 2 sons and I.  We are going to bet that you can not make that 10 foot putt. In fact we will give you 5 to 1 odds.  I like to gamble with my boys, but not with my clients.  In fact, I have Never had a client lose money in the retirement plan that we built.  The first question I will ask you is – “What is your tolerance for risk?”  How do you feel when the stock market has a big drop?  Does it cause you to feel anxious and lose sleep?  If so, then your tolerance for risk is low.  What’s the alternative? Well you could use CD’s at the bank, but the rates are so low right now.  We need to keep in mind that there will come a point when inflation will begin to push prices higher.  You may not want risk, but you will need a higher rate of return to stay ahead of rising prices.  Is there a way to balance low risk and reasonable rates of return?  These are the types of strategies that I focus on everyday with my clients.  See my post – “The Long Haul Myth” for more information about risk and returns.