Covers topics – reduce risk while building wealth, factors that reduce investment risk, how to manage risk while building wealth, how much of your net worth should be in cash, portfolio cash allocation
It’s often said that managing risk is as important as getting good investment returns. Ownership of defensive investments can offset potential losses from other investments while smoothing out returns. Treasury bonds, T bills, gold, money market funds, put options, TIPS, and inverse ETF’s are all examples of defensive investments. These are all assets that tend …
There are simple ways to make money when stocks drop using more traditional investing methods and there are also more advanced strategies to make money when stocks drop. In this post, I will cover simple to slightly advanced strategies that both investors and many wealth managers use to make money in down markets for their …
The simplest and only sure way to avoid losing money in the stock market is to not own stocks. Stocks, however, can be a profitable passive investment for busy investors who understand stock market losses, are aware of stock market cycles and have chosen how much stock market risk they want. That’s what this post …
No one wants to run out of cash. By cash, I mean that super safe stash you keep in a money market account that won’t fluctuate in value the way stocks do. But just how much should you keep in a money market account? It depends on some personal things like your investments, portfolio allocation, dependents, …
How Much to Keep in Money Market Accounts | 15 Factors Read More »
Updated: February 12, 2020 One of the biggest dangers for soon to be retirees and recently retired folks are bear markets. We saw this in the first 2000 decade when stock returns were negative for the 10 year period, something no one had planned for in retirement. Yet we know stock markets build wealth over time and that bear markets …
Bear markets are a fact of life for stock market investors but they don’t have to be detrimental to your net worth. After investing through several bear markets, both alone and with financial advisors, I’ll share how to prepare for bear markets. While I’m an AFC® (Accredited Financial Counselor), I write from my own investing experience of 40 …
How to Prepare for Bear Markets | 11 Steps [Video, Chart] Read More »
Managing risk in the stock market becomes more important as you get older. We all learned this from the challenging 2000 decade when the stock market (S&P 500 index) had an annualized negative return of 2.72% (excluding dividends) for the entire 2000 decade! If you’re wondering how to manage risk in the stock market, investing …
Every time I hear someone confidently tell me that they are invested in “safe stocks” so they’re not concerned about a “stock market crash,” I silently shudder. Are stocks safe for retirement? It all depends on your risk tolerance, net worth, stock market valuations and other factors explained below. After investing for almost 40 years …
Are Stocks Safe for Retirement? 8 Important Factors Read More »
After surviving a few bear markets over the past 40 years as an investor, I’ve learned many lessons from them. Reducing risk in stocks before bear markets take full hold helps investors protect their net worth as well as have capital to invest in stocks again once unusually low valuations are reached. This sounds almost too obvious to write, but most investors don’t take …
Reducing Risk in Stocks | 13 Lessons from Past Bear Markets Read More »
Toward the end of bull markets, it’s smart to see what stocks went up in past bear markets for recession proof investment ideas. While there have been some short and minor bear markets since 2008, the severe 2008 bear market continues to provide excellent data and investing lessons for everyone. Stocks that went up in …
Stocks That Went Up in 2008 | Plus ETFs, Bonds, Gold Read More »
Updated August 8, 2019 Investing in bonds definitely has risks, contrary to what many investors think. Just what are the risk of bond investments? They include interest rate risk, default risk, inflation risk, call risk and economic risk. The fact that bonds are used to offset risk from stocks, and the very long bull …
What Are the Risks of Bonds? Chart Stocks Vs Bonds Read More »
Income investing comes with both risks and rewards, just like all investments. The risks of income investing in bonds includes interest rate risk, default risk, inflation risk and more. And for stock income investors, there is bear market risk and political risk. Both bond and stock income investors face company or entity specific risk and …
The closer you get to retirement, the more important it becomes to avoid nasty, major stock market moves down, and capture those lucrative stock market moves up. This fuels the drive for investors to know if the stock market will go up or down over the next few years with a higher degree of likelihood. …
How to Know If the Stock Market Will Go Up or Down Read More »
Investing in the stock market can be unsettling, especially after stock prices have climbed sky high. At any given time, I ask myself “How will a stock market crash affect me?” To get a very reasonable estimate for how much my net worth will decline in the next stock market crash I do this simple …
How Will a Stock Market Crash Affect You? [Infographic + Video] Read More »
Deciding how much of your net worth to keep in cash is a huge part of managing risk while building wealth, as well as contributing to a peaceful existence. The simple formula to figure how much of your net worth should be in cash is the amount you need to cover all your living expenses …
How Much Of My Net Worth Should Be in Cash (Liquid Net Worth, Cash Percentage) Read More »
Do you live with an ongoing but subtle fear that you’ll run out of money? And does that fear get louder with each passing year? In this post, I’ll share how to not outlive your money. Taking action on the right steps for where you are right now will help calm your fears. Don’t Assume …
Do you worry about losing your money? If so, this isn’t necessarily all bad; worry can prompt you to make smart moves that lower investment risk when needed. The following steps can all help reduce investment risk: increase the percentage of portfolio cash, diversify asset classes, buy undervalued assets, own noncorrelated investments, monitor bond risk, …
10 Ways to Reduce Investment Risk While Building Wealth Read More »
Should your investment portfolio have 90% in stocks and bonds and 10% in cash? Or should it have 60% in stocks and bonds and 30% in cash? The commonly recommended percentage for portfolio cash is ten to fifteen percent based on an age appropriate asset allocation model. Tactical investors and financial advisors, however, adjust cash …
What Percentage of Cash Should Be in My Portfolio? Read More »
