Risk Tolerance

Risk tolerance measures how much risk you are willing to handle. How comfortable are you when your investment takes a hit while waiting for it to pick up or appreciate in value? If you’re close to retirement age, you most likely have a much lower risk tolerance than a 25 year old person at the start of his or her career. If you have a low risk tolerance, you’re risk averse and capital preservation is your priority. If you are an aggressive investor with a high tolerance, you’re willing to accept losing your capital in exchange for higher potential returns. However, jut because you have the stomach for a high-risk investment doesn’t mean you should. It is important to figure out how much financial ability or capacity you have to handle risk.

New Health Care Expense Software is Taking Aim at a Retirement Planning Void

There is a strong case to be made for health care as the linchpin of retirement planning.  Virtually...

An Interview with Jack Marrion and John Olsen, Authors of Index Annuities: A Suitable Approach

Jack Marrion heads a research consultancy focused on the...

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Variable Annuities, Financial Planning and Human Capital

Although mentioned previously , it is worth noting again that Moshe Milevsky is the most active, creative and interesting voice in the asset decumulation industry. Moshe produces copious amounts of outstanding materials that shed light on the world of annuities for both professional and consumer audiences. A recent interview in The Journal of Financial Planning is highly recommended. Moshe is working on a soon to be released book on lifecycle investing . In the Journal of Financial Planning...

House Bill Would Apply Fiduciary Status to Annuity Sales

The House Financial Services Committee passed the Investor Protection Act of 2009. This legislation would have a meaningful impact on the sales of annuities and mutual funds as the current suitability standard would be replaced by a much higher fiduciary standard. The net effect would be a big win for financial services consumers. Currently, suitability standards require that financial advisors determine whether a product is appropriate for a given client profile, with risk tolerance as one of...

Part Two of the Interview with Wharton Professor David Babbel

This is the second part of an interview with Professor David Babbel.

Part one can be found here.

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