Risk profile on the cheap

Written by Gary Silverman, CFP®

I’m interrupting my regularly scheduled column for this announcement:

FinaMetrica is offering their risk profile analysis for 90% off the normal price. That’s right, the normally $40 assessment can be yours for only $4. But why should you care?

Well, regular readers might remember that I have two main questions when looking at someone’s investments: How long until you need the money and how much volatility (risk) you can stand. Most people know when they might need the money; most do not know how much volatility they can stand. Saying you are conservative or aggressive is not really a measurement. Just how conservative or aggressive are you? What seems conservative to one person may seem aggressive to another.

With the recent volatility in the market, more people are suddenly aware that stocks and other investment assets can be bouncy at times. It’s pretty regular that after the market has been going up for a while (for instance from 2009 through 2014) I’ll get more and more people coming into the office wanting their portfolio to be more aggressive. But once the volatility hits those same folks call up and wonder if we shouldn’t get out of the market until things “settle down”.

This pattern can have an investor doing a buy high, sell low strategy – never a good option.

As I’ve mentioned before, we use assessments to ascertain how much risk a person can take on without feeling so uncomfortable with their portfolio when things go south that they do something stupid. One of the best I know (and most expensive) is FinaMetrica’s risk tolerance test. Consumers normally have to shell out $40 to take this test. Through the end of September, you can take this test for only $4.

Note that other than paying them a lot of money every year to use this same test for my clients, I have no connection with FinaMetrica. So this is not a make-Gary-rich-scheme.

So, if you want the discount, get on your computer and go to the following page: http://www.myrisktolerance.com/septemberspecialoffer

The 25-question test takes just 10 to 15 minutes to complete. You’ll get a personal risk profile report which will go through the results. If you have a partner in your investing, I suggest you each take and compare reports. Then you can discuss how to manage your portfolio in a way that satisfies each of you.

If you don’t have any investments, then you don’t really need to take the test. Buy an ice cream instead. If you are working with an investment adviser, they likely have their own favorite measurement tool to use. If they don’t, you may want to ask them why.

This article was published September 6, 2015 in the Wichita Falls Times Record News Your Money column.