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Whitaker-Myers Wealth Managers is an SEC-registered investment adviser firm. The information presented is for educational purposes only and intended for a broad audience. The information does not intend to make an offer or solicitation to sell or purchase any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. Whitaker-Myers Wealth Managers reasonably believes that this marketing does not include any false or misleading statements or omissions of facts regarding services, investment, or client experience. Whitaker-Myers Wealth Managers has a reasonable belief that the content will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. Please refer to the firm’s ADV Part 2A for material risks disclosures.

​

Past performance of specific investment advice should not be relied upon without knowledge of certain circumstances of market events, the nature and timing of the investments, and relevant constraints of the investment. Whitaker-Myers Wealth Managers has presented information in a fair and balanced manner.

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Copyright (c) 2023 Clearnomics, Inc. and Whitaker-Myers Wealth Managers, LTD. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via www.clearnomics.com or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company's stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security--including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. All unauthorized reproduction or other use of material from Clearnomics, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Clearnomics, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Clearnomics, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.

  • Writer's pictureSummit Puri
    • Aug 5
    • 3 min read

Risk Ability vs. Risk Tolerance

Great Reads

If you get to know me personally, you’ll learn that I love to read. I frequently share interesting reads and books with our team, and today, I’d like to do the same with this audience. Today, I want to share insights on financial strength vs. emotional strength in taking risks.

 

Our team at Whitaker-Myers Wealth Managers is constantly producing great quick reads that I have always found insightful. We typically have at least two new weekly articles covering industry news, financial strategies, and budget-friendly tips. All of these can be found on our blog page. But for today’s purpose, here are a few written by some of our team members that are great reads on this topic:

 

 

What I truly appreciate from our team is their wealth of knowledge and their ability to simplify complicated strategies and concepts for those who may be unfamiliar with these topics and industry language. This is no easy task, and it highlights the team's dedication to one of our core values of always having a heart of a teacher. If you’d like to schedule some time with any of our advisors or the specific advisors above, click on their respective hyperlinks to schedule. They can help you apply these concepts to your own financial situation. Now, on to today’s topic.

 

Risk Tolerance

Drew threw a touchdown in his article above (FYI – Drew was a quarterback for his college football team). I highly recommend reading it.  Risk tolerance is an investor’s mentality when taking risks. What I mean by that is how comfortable the investor is with taking risks with all factors considered. This includes family, investment time horizon, future plans, understanding of the economy, geopolitical risks, asset class, location risks, systematic and unsystematic risks, and anything that could potentially impact the portfolio.

 

Wow, yes, that is a lot to consider, and unfortunately, that list is incomplete. I would argue that, other than the behavioral finance aspect of risk tolerance, the most important factor is the investor's phase of life.

 

“It's the phaaaaassssseee of life” (the highly awarded Circle of Life remake, releasing with Drew, Nick, and Jake as lead singers Q4 2024). Depending on where the investor is in the phase of life, their investing strategies and asset allocations to risky or riskless assets can vary.  Early in our careers, most investors may be more willing to invest in risky assets to help grow their portfolio with a long-term horizon. This is commonly referred to as the wealth-building/growth phase. Compound interest and steady investing can be your best friend early on. On the other hand, the investor may decide to move into less risky assets towards retirement. During these years, the investor may try to preserve their portfolio. Thus, this is commonly referred to as the preservation phase.

 

Risk tolerance – the emotional ability to take risks.

 

Ability to Take Risk

Depending on the investor’s risk tolerance, they may decide to take some risks in their portfolio. The question, however, is, does the investor have the financial ability/flexibility to assume the risk? In my experience, investors are eager to build wealth early on and want to invest aggressively. Depending on their risk tolerance, this may be appropriate, but they may be on baby steps 1-3, and it may not be in their best interest to invest aggressively.  Or even more importantly, they don’t have the money to invest aggressively. It may be in their best interest to pick a money market fund or treasury that will provide the security they need.

 

Each investor is different

The investor’s style, investment philosophy, risk tolerance, ability to take risk, knowledge, and many other factors come together to determine the right portfolio fit. Understanding the holistic picture and aligning the investor's strategic goals with their investments is the best service a financial advisor can provide. Our Whitaker-Myers Wealth Managers team ensures you have all the tools you need to succeed. Our group of teachers is always willing to have a deep-dive analytical discussion or can help break down the process and answer questions so you feel comfortable.

 

If you would like to talk to a financial advisor about your investments and future goals, let’s chat! Contact one of our advisors to schedule a meeting today.

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ความคิดเห็น

Whitaker-Myers Wealth Managers is an SEC-registered investment adviser firm. The information presented is for educational purposes only and intended for a broad audience. The information does not intend to make an offer or solicitation to sell or purchase any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. Whitaker-Myers Wealth Managers reasonably believes that this marketing does not include any false or misleading statements or omissions of facts regarding services, investment, or client experience. Whitaker-Myers Wealth Managers has a reasonable belief that the content will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. Please refer to the firm’s ADV Part 2A for material risks disclosures.

​

Past performance of specific investment advice should not be relied upon without knowledge of certain circumstances of market events, the nature and timing of the investments, and relevant constraints of the investment. Whitaker-Myers Wealth Managers has presented information in a fair and balanced manner.

​

Copyright (c) 2023 Clearnomics, Inc. and Whitaker-Myers Wealth Managers, LTD. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via www.clearnomics.com or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company's stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security--including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. All unauthorized reproduction or other use of material from Clearnomics, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Clearnomics, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Clearnomics, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.

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