Do you ever wonder if you are taking the right amount of risk in your investment portfolio? Does your portfolio fluctuate more than you are comfortable with but your advisor doesn't seem to validate your concerns? Is your portfolio too risky, not risky enough, or is the risk you are taking just right? How do you know?
Most investors don't have a good sense of whether they are taking the appropriate amount of risk usually because of a lack of, or poor risk analysis tools available. For example, most traditional risk questionnaires ask questions such as how old you are, your time frame for when you need the money, and whether you are focused on growth, income, safety of principal, etc. Just because a young person may have 30 years until retirement doesn't mean he/she should take a lot of risk if they are uncomfortable with high risk. Just the same, just because a 60 year old may be nearing retirement doesn’t necessarily mean they should invest conservatively as there may be other factors involved that allow that person to take more risk than a similarly aged peer. It is these, and other fundamental flaws in traditional risk questionnaires that can result in a misalignment of risk comfort and portfolio design and ultimately taking on more risk or less risk than intended both of which can potentially knock a financial plan off course.
To solve this problem, Portnoff Financial has recently partnered with Riskalyze, a cutting edge technology build on the academic framework that won the Nobel Prize for Economics that pinpoints your acceptable level of risk with unparalleled accuracy to properly align your portfolio with your risk comfort zone.
So how does it work and why is it different?
For starters, the typical flawed questions in most risk questionnaires are either eliminated or carry much less weight. Also it is difficult to understand the impact of percentage based losses or gains without the context of portfolio size so the value of your portfolio is considered and the percentage based losses are translated into actual Dollars so that you can better visualize and understand the risk you are taking. Then Riskalyze will take you through a series of questions (fewer on the simple version and more on the detailed version) aimed at helping you determine just how much downside risk you are willing to expose your portfolio to for the chance to earn a potential gain.
If you want to know if your portfolio design is aligned with your risk comfort zone, take a free brief Risk Quiz at http://www.portnofffinancial.com/free-risk-analysis.phpto pinpoint your exact risk tolerance and receive your Risk Number. After completing the quiz, you will have the option to request a free portfolio review by Portnoff Financial to compare your Risk Number with the Risk Number of your portfolio. If there is a discrepancy between the risk level of your portfolio and your risk comfort zone, Portnoff Financial can re-engineer your portfolio to better align with your Risk Number and provide you with an Investment Policy Statement including a projection for potential gains and losses that you can expect from your re-engineered portfolio.
With Portnoff Financial and Riskalyze you can feel confident that the risk in your portfolio properly aligns with your comfort zone, investment goals, and expectations.
To learn more about your Risk Number, or to request the more detailed Risk Quiz, schedule a 15 minute Introductory Call or a complimentary Discovery Consultation at http://meetme.so/DiscoveryConsultationor call me directly at 732-226-3113(NJ) or 949-226-8342(CA).