August Financial Planning Tip: Are You Taking Too Much Risk?

August Financial Planning Tip: Are You Taking Too Much Risk?

July 26, 2017

By Jere Smith, CFP®, CLU®, Financial Advisor at Point Wealth, LLC

Risk is everywhere, every day. But when it comes to your money, taking on too much risk can mean not reaching your goals. While there are some things we can’t control, such as a natural disaster or political scandal causing the markets togo haywire, there are certain steps we can take to reduce risk. Risk is an unavoidable element of investing, but we need to focus on what we can control. This is true in many areas of life, but especially in financial planning. Let’s look at some ways to get started on minimizing risk in your finances.

Focus On The Fundamentals

We often get so caught up in the complex details that we forget the basics, but it is the fundamentals that set the foundation for success. This mindset was drilled into me from a very young age playing sports in my small hometown. I can still hear my coach hollering, “stick to the fundamentals,” or “use the backboard.” It’s when we get fancy, like trying to time the market, that we lose control. Instead, focus on the essentials.

1. Have A Plan

There’s an old adage that says, “Success doesn’t just happen; it’s planned for.” If you want to start decreasing your investment risk, then you need to create a plan to do just that. Without a plan, you leave yourself open to emotional decision making in the heat of the moment that could result in a loss of your life savings.  

You may think that won’t happen to you, but if you’ve found yourself asking “should I be taking less risk with my investments?” it probably means you are. If you don’t have a plan in place, you will fall prey to an internal struggle of feeling like you are missing out when things are good and worrying about loss when things are bad. Right now, the markets are up and many of us feel comfortable with the growth we’ve witnessed, but it wasn’t that long ago that the devastating downturn of 2008 led to plenty of lost sleep and diminishing nest eggs. So you waffle back and forth between wanting to jump on the bandwagon when the markets are strong and your accounts are earning money and experiencing crippling fear that the markets could dive and you won’t have enough time to build up your savings before retiring.

This process for making decisions takes us down a road of having an inappropriate amount of risk for the season of life we are in. Don’t let yourself get to the place of needing to backpedal and regain the control you could have had all along.

2. Set Goals

Do you have a goal for your finances or are you just crossing your fingers and hoping you have enough for the lifestyle you want in retirement? Think of it this way: if you are out for a pleasant Sunday afternoon drive, would you go 75 miles per hour? Your specific goals will determine the amount of risk you can and should take with your money. For example, do you want a guaranteed source of income in your golden years? Then you will stick with your investments for the long-term, not buying and selling based on the current market conditions. Do you desire substantial growth? Then you might take on more risk and invest less conservatively. Every dollar in your portfolio needs to be earmarked to be working towards a specific goal.

3. Take Action

This is where you need to follow through on your plan and your goals. Don’t let yourself procrastinate where your money is involved. Work with your advisor to ensure that your investments are at the right risk level for your situation and stay disciplined when the markets feel like a roller coaster.

How We Can Help

At Point Wealth Management, our goal is to help protect your hard earned money and avoid potential loss. Our time-tested formulas take the guesswork out of investing and removes emotions from the equation. We do this by offering WealthGuard™, an early-warning system that works to help protect your investments in all market conditions so that you can go forward with added peace of mind. If you have found yourself wondering if you are taking too much risk, let us help you create a plan, set goals, and follow through so that you can achieve retirement freedom. Call us today at 715-870-2450 or contact Point Wealth Management in Wausau, Wisconsin by clicking this link.

About Jere Smith

Jere Smith is a financial advisor at Point Wealth Management, an independent financial planning and investment management firm. Serving individuals, families, and privately-owned businesses, he helps great people create great financial success through his services, including financial planning, retirement planning, estate planning, charitable giving strategies, and portfolio management. Along with nearly a decade of experience, he is a CERTIFIED FINANCIAL PLANNER™ professional and Chartered Life Underwriter, two of the most esteemed designations in the industry. He is passionate about education, whether it’s providing it to clients or adding to his own knowledge, and has written an article that appeared on Based in Wausau, Wisconsin, Jere serves clients in multiple states. To learn more, visit or connect with Jere on LinkedIn.

Investment Advisory Services offered through Retirement Wealth Advisors, (RWA) a Registered Investment Advisor. Point Wealth Management and RWA are not affiliated.

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