Have you ever filled out one of those “what’s your risk tolerance” questionnaires to determine how much money you can accept or tolerate losing in the market?
Brokers are now required to have you do this. Or you may have filled out a self-scoring one online. You know, ones that ask questions like what would you do if the market dropped 10% or 20%?
Well… it turns out these questionnaires are “unhelpful at best and harmful at worst,” according to experts on investing and the psychology of risk.1
These questionnaires assume your risk tolerance is an integral part of who you are and no more changeable than your IQ or shoe size. But nothing could be further from the truth.
Researchers have shown that your tolerance for risk varies constantly, depending on literally thousands of factors. Studies show how much risk you’re really able to tolerate is associated with many factors such as: [Read more…] “Is risk a four letter-word?”
I’m holding in my hands a hot-off-the-press Report from the well-respected research firm, DALBAR, Inc., about the actual returns investors have been getting in the stock market over the last 20 years. The news is shocking, but should make sense if you’ve been having the feeling your investment accounts aren’t rising at the rate the market has been…
- The average equity fund investor has gotten less than half of the return of the S&P 500 over the last two decades – beating inflation by less than 1% per year
- The average fixed income investor got – you should probably sit down for this – only 15% of the return of the related benchmark (Barclay’s Aggregate Bond Index)
- The typical asset allocation investor got less than 30% of the return of the S&P 500 – 2.12% per year to be exact – and didn’t even keep up with inflation!
So… was that worth all the roller coaster ups and downs and sleepless nights?
[Read more…] “Shocking New Report Wall Street Doesn’t Want You To See”
A very revealing article appeared in the Sunday, July 25 edition of the Wall Street Journal entitled, “Ten Stock-Market Myths that Just Won’t Die.”
Maybe you don’t quite believe what I’ve been saying for years. This article confirms exactly what I’ve been trying to tell you…
This article is must-reading for anyone who’s been scratching their head and wondering…
If what they say about the long-term returns you should be able to get in the stock market is true, how come I’m not rich?!?”
Please pay particular attention to…
Myth #1: “This is a good time to invest in the stock market”
Myth #2: “Stocks on average make about 10% a year”
And the article author’s insight into Myth #10: “Stocks outperform over the long term” is priceless.
I’ve quoted many sources confirming what this Wall Street Journal article says. How many more sources do you need to hear it from, before you request a free Analysis that will show you how much your financial picture could improve if you added Bank On Yourself to your financial plan?