Frequent Questions

Do advisors make more money if I take more risk?

Yes. In general, equity products produce more revenue than fixed income products for advisors and their firms.

Is it possible to know my future risk exposure?

There is no measurement that can accurately predict the future volatility of your portfolio compared to the market.

What is a low risk portfolio?

The portfolio has lower risk characteristics than the market. You should make less in rising markets and lose less in falling markets.

What is a high risk portfolio?

The porfolio has higher risk characteristics than the market. You should make more in rising markets and lose more in falling markets.

Can Wall Street produce high returns for low risk?

No, this is a sales scam that is used by unethical advisors.

Who are the aggressive investors?

Their goal is to maximize performance. They are willing to incur substantial losses in bad years to achieve higher returns in good years. Their principal investments are common stocks that have volatile prices.

Who are the conservative investors?

Their primary goal is preservation of capital. They are not willing to incur significant losses in bad years to achieve higher returns in good years. Their principal investments are bonds and other investments that produce income. 

Why do markets have good performance years and bad performance years.

The markets are cyclical like the U.S. economy. We have periods or rapid growth and periods of recession. Economists call this feast and famine. Wall Street business practices exacerbate the volatility with bubbles that create rapid growth followed by rapid decline.