Reduce Investment Risk

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

What Are Defensive Investments?

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 …

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Woman cash | How to Make Money When Stocks Go Down

How to Make Money When Stocks Drop

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 …

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money market vs stocks

How Much to Keep in Money Market Accounts | 15 Factors 

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, …

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Bear Chart | How to Prepare for Bear Markets

How to Prepare for Bear Markets | 11 Steps [Video, Chart]

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 …

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Bear vs Bull | Are Stocks Safe for Retirement?

Are Stocks Safe for Retirement? 8 Important Factors 

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 …

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risk blocks | reducing risk in stocks

Reducing Risk in Stocks | 13 Lessons from Past Bear Markets

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 …

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hands up

Stocks That Went Up in 2008 | Plus ETFs, Bonds, Gold

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 …

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What Are the Risks of Bonds? Chart Stocks Vs Bonds

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 market …

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How Much Of My Net Worth Should Be in Cash (Liquid Net Worth, Cash Percentage)

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 …

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10 Ways to Reduce Investment Risk While Building Wealth

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, …

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