Not that long ago, I jumped onto Thunder Road in an effort to relive my childhood; and I hated every second of it. Being used to the smooth and fast turns of newer coasters, I had forgotten how rough the ride was with Thunder Road. It was so brutal that I knew a chiropractic adjustment was in my near future. It would be the last time that I would ever ride that coaster.
At the time of this draft, global markets have experienced a significant downturn, and it is possible that we haven’t seen the end of this extreme volatility. I’ll admit that times like these can give you heartburn, especially if you stay glued to the television and your investment portals. However, I cannot stress enough that what we are experiencing at the moment is a normal part of investing.
When we sit down with clients, we work hard to learn all we can about their goals and priorities. As much as we can allow, we want the financial planning process to be a collaborative effort. As part of that planning process—a part that never leaves—we must continuously assess our plan’s progress toward our goals. This includes an understanding of how prepared we are for what we call Black Swan events.
In this article series, we are exploring a few ways that I believe some clients and financial professionals may have a disconnect in their conversations about risk—especially when planning for retirement.
One of the most common words used in the investment world is risk. Of course, seasoned financial professionals will often qualify the term with a descriptor so that we get things like: market risk, interest rate risk, company risk, reinvestment risk, etc. In fact, the number of ways that risk can be broken down into specifics is somewhat overwhelming, especially if you’re a novice in the investment world.