Determine that the thing can and shall be done and then we shall find the way.
–Abraham Lincoln

It’s important to understand a Client’s risk tolerance before designing a personalized investment plan. A common way to think about investment risk is:

• Present Risk Represents the risk level you are currently invested based on specific assets and asset allocations in your current portfolio.
• Acceptable Risk This is the level of investing risk you are most comfortable, and even in times of market downturns, you are able to remain satisfied with your long-term investment plan.
• Necessary Risk  This is the amount of risk required to meet your financial goals. This needs to be carefully reconciled with your Acceptable risk level.

Riskalyze®  COVENANT utilizes this unique tool to assist clients in better understanding and analyzing their comfort level for investing risk. After completing a brief online survey, a client’s risk tolerance is measured and then compared to the risk calculated in the client’s current portfolio. To the amazement of many clients, the risk currently baked into the existing portfolio based on asset allocation and asset selection often times exceeds the amount of Acceptable risk their survey calculated.