Do you know your risk tolerance? Mike looks at several questions, and your answers may surprise you.
Due to a general market correction, the price of one of your investments decreases 14% a short time after you buy it, what would you do?
- Sell it, so you don’t have to worry about if it continues to decline
- Hold onto it and wait for it to go back up.
- Buy more because it looks even better now!
You have just reached the 10000 plateau on a game show, so now you are at the point where you can walk away with your winnings or betting it all in one of three scenarios:
- Have a 50% chance of winning 50,0000
- Have a 25% chance of winning 75000
- Have a 5% chance of winning 200,000
“Risk doesn’t bother me as long as I don’t lose anything.”
“Overrating past performance is the most common mistake mutual fund investors make. Giving inadequate weight to risk, however you manage that risk, would be number two. And being willing to shift funds too quickly would be number three” – John Bogel
“Always diversify your investments” – Sir John Templeton
“If you don’t feel comfortable owning something for ten years, then don’t own it for ten minutes” – Warren Buffett
“Don’t try to buy at the bottom and sell at the top. It can’t be done, except by liars.” – Bernard Baruch
“The only function of economic forecasting is to make astrology look respectable.” – John Kenneth Galbraith
When looking at a publication about investing, look at back issues and see what they were saying. Were they accurate? Are they owning up to mistakes they made?
Want Mike and his team to come do a workshop for your company? Contact him at 1-800-588-7526 or mike@talkingmoneyradio.com for details.
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