Rethink Your Risk Tolerance: Time for an Honest Portfolio Check-Up

Lately, market ups and downs have many investors asking themselves an important question: Does my portfolio align with my personal risk tolerance? Because markets can shift quickly, financial professionals recommend reviewing your investments to ensure they are consistent with your risk tolerance and long-term financial objectives.

This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. All investing involves risk, including the possible loss of principal. Please consult a qualified financial advisor before making investment decisions.

Did Recent Volatility Make You Anxious?

Financial advisors have observed that more clients are feeling anxious after recent market swings. Many people believe they are comfortable with risk until they experience actual losses. If you have felt uneasy recently, you are not alone. Experts recommend using this as an opportunity to reassess whether your investments are still consistent with your risk tolerance and long-term plan, rather than making impulsive decisions.

Would You Behave Differently Next Time?

Analysts note that periods of market stress often reveal an investor’s true risk tolerance, unlike calm markets when optimism is high. Following a volatile year, many advisors are revisiting risk tolerance with clients and having discussions to help ensure investment strategies remain appropriate.

Recalibrate for Comfort and Results

Updating your risk profile is not about avoiding opportunities, but about ensuring you are comfortable with your investment strategy during periods of volatility. Whether you work with a financial professional or use digital platforms, reviewing your asset allocation can help confirm your investments are aligned with your risk tolerance and objectives.

Ready for What’s Next

Experts remind investors that risk tolerance is not static. It can change in response to life events, market movements, and evolving financial goals. Periodically reassessing your comfort with risk and making incremental adjustments can help ensure you are prepared for future market developments.

If recent market volatility has caused concern, it may be a good time to reassess your personal risk tolerance. Consider reviewing your investment approach and consulting with a qualified financial professional to help ensure your portfolio remains suitable for your needs and objectives.

Disclosure:
This article is for informational and educational purposes only and should not be construed as investment, legal, tax, or financial advice. All investments involve risk, including the possible loss of principal. Past performance is not indicative of future results. Please consult with a registered investment adviser, financial planner, or other qualified professional before making any investment decisions.

This material is not intended to serve as personalized tax, legal and/or investment advice since the availability and effectiveness of any strategy is dependent upon your individual facts and circumstances. Duncan Williams Asset Management is not a legal or accounting firm. Please consult with your legal or tax professional regarding your specific tax situation when determining if any of the mentioned strategies are right for you.

Sources:
Julius Baer: https://www.juliusbaer.com/en/insights/wealth-insights/how-to-invest/risk-tolerance-how-to-find-the-right-financial-fit/
Beacon Investing: https://beaconinvesting.com/the-impact-of-market-volatility-on-investor-emotions-strategies-for-navigating-emotional-risk/
Zynergy Retirement: https://www.zynergyretirement.com/blog/reevaluating-risk-tolerance-and-investment-strategy/
Investopedia: https://www.investopedia.com/ask/answers/021615/what-safest-investment.asp
Bankrate: https://www.bankrate.com/investing/low-risk-investments/
AdvisorFinder: https://advisorfinder.com/resources-for-clients/risk-quiz
Charles Schwab: https://www.schwab.com/learn/story/guide-to-risk-profiles
Vanguard: https://investor.vanguard.com/tools-calculators/investor-questionnaire

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