Risk : Your Personal Comfort Level, Your Unique Strategy

Risk : Your Personal Comfort Level, Your Unique Strategy

Balancing risk and reward is the backbone of wealth management, and that’s why before getting started on a financial plan, OptiFour works to understand its clients’ personal philosophy toward risk. With volatility in the stock market, sluggish economic growth, the threat of rising interest rates, and a deep decline in retirement savings, the typical investor is understandably leery of risky financial investments. The wealth advisers at OptiFour will help you figure out your tolerance for financial risk and develop a strategy to help you meet your long-term goals. It all starts with risk management.

Understanding Risk Management

There are innumerable ways to manage risk, from reallocating resources to investing in insurance policies. In general, risk management is designed to align an individual’s investments with their willingness to withstand loss. An investor whose lifestyle would not be affected by a 30% loss of their overall assets would be categorized as risk tolerant. Someone who can only afford to lose 5%, on the other hand, would be considered risk averse. Risk-averse investors typically opt for conservative options like municipal bonds or CDs. Risk-tolerant investors often invest more heavily in individual stocks. Naturally, these are just generalizations. Depending on the individual’s risk tolerance, OptiFour’s financial planners may suggest investment or allocation in a variety of asset classes, insurance policies, and 401ks.

Evaluating Your Situation

Risk tolerance isn’t simply a numbers game; it has a lot to do with personality. Some individuals prefer to “live on the edge,” trusting their instincts to guide them toward financial success. Others may see a penny saved as a penny earned and feel more comfortable when less is at stake. There’s nothing wrong with being aggressive, and there’s nothing wrong with being prudent—it all depends on what you’re comfortable with. Having financial goals will help you to stay the course regardless of the financial climate, and the wealth advisors at OptiFour are here to help.

Working with OptiFour

OptiFour Integrated Wealth Management helps its clients contextualize their emotions within the framework of fact-driven investment and asset-allocation strategies. Our team of wealth advisors have experience working with clients from many different backgrounds with many different financial goals. With our personalized service, we can carefully assess your risk tolerance and work with you to create a plan you’re comfortable with. For complete information on our services, please visit our homepage. If you’d like more news and analysis, feel free to read our previously posted blogs.