What is your risk tolerance? If you're new to investing, risk tolerance refers to your personal comfort level with potential losses. Keep in mind, there is some level of risk involved with all types of investing. The higher the risk, the bigger the return and the bigger the losses. Once we understand your risk tolerance number, we can create an investment strategy designed to help you achieve your financial goals on your timeline.

While you may love taking risks, your financial situation may not allow for it. A young couple with a new baby and a mortgage may not be able to afford to have a risky investment portfolio. Meanwhile, a middle-aged couple with grown kids and a large disposable income may be willing and able to take more risks. Your investment strategy will depend on when you want to reach your short-term and long-term goals and how much risk you are able to take.

Saving for a down payment on a house or your child’s college education would be considered short-term goals. Your timeline may be anywhere from 2-5 years. Saving for retirement is a long-term goal. Depending on your age, your timeline could be anywhere from 5-20 years or more. As you achieve each short-term goal you will either define your next objective and adjust your portfolio accordingly or adjust your investment strategy to focus on building your retirement nest egg.

If all of this seems overwhelming, we are here for you. At Alloy Wealth, we help clients determine their risk tolerance then educate them on investment management principles and strategies so they can feel confident when making investment decisions. Investing is extremely personal and specific to the individual. So, it’s okay if we find you can financially afford to take risks yet feel uncomfortable with aggressive investment strategies. We want your portfolio to reflect your comfort level as well as your timeline and goals. If you have questions, contact us to schedule a consultation at 800-689-3935