Episode 104- Financial risk tolerance

1:01:28
 
Share
 

Manage episode 268757302 series 1750340
By toothbetold and Dr. Ackah. Discovered by Player FM and our community — copyright is owned by the publisher, not Player FM, and audio is streamed directly from their servers. Hit the Subscribe button to track updates in Player FM, or paste the feed URL into other podcast apps.
In this episode we talk to Mr.Jonathon Brown of Brown service group LLC. One thing we all struggle with is understanding how much financial risk we can tolerate with our money. This episode will allow you to take a take to understands where you stand. Mr. Brown writes: In my experience, I’ve had dentists who claim they are conservative investors but I end up finding out they are really very aggressive. Other times, I get dentists who claim they are aggressive but they end up being more conservative. How does this happen? How can someone be unaware of how they view risk and how does a financial advisor help clients navigate the investment risk landscape? All investments require the assumption of some form of risk. However, each individual investor is unique, and their willingness to assume certain risks may vary from person to person. Market risk, credit risk, liquidity risk, operational risk, legal risk, and political risk are all common risks that individuals and institutions face when investing. Before we go any further, I’d like to help you define the financial risks I just mentioned. -Market Risk: the fluctuation of value due to market forces. An example would be the recent volatility of the S&P 500. -Credit Risk: the ability for someone to pay their bills. An example would be the defaults in the housing crisis. -Liquidity Risk: the ability to liquidate the asset into cash. An example would be accessing cash from a bank ATM versus accessing cash from equity in a home. -Operational Risk: the management’s ability to effectively meet organizational goals. An example would be the appointment of a new CEO. -Inflation Risk: the risk that assets do not keep pace with price and interest rate growth. An example would be “money under the mattress” which does not keep up with inflation rates. A very common scenario where I think it’s important to have some awareness of your risk threshold is when you are speaking to your family and friends. They may not have the same income, they may not be the same age, or they may not have the same goals. As a high income earner such as a dentist, it’s important to understand what level of risk you are willing to tolerate. Some investments may be more or less suitable depending on how much risk you are willing to take. It’s also important to work with a qualified financial professional in order to determine what your risk adjusted portfolio should look like. If you want more info go to: https://www.thebrownservicesgroup.com/

113 episodes