What To Focus On: First – Goals, And Only Then – Portfolio
When discussing investment plans with clients, it always makes perfect sense for an advisor to talk about ‘why’ before ‘how much’. The ‘why’ for the investor is always the goal. This is why they invest the money and certainly why they tolerate any risk in the first place. In this respect, there are excellent insights from Michael Kitces’ blog post about the interplay between risk tolerance, goals and risk capacity. Here is the link to that post. Measuring risk tolerance without asking why the client is tolerating risk has always perplexed me. Does anyone you know why it came to be that way in the world of financial advice? I...Read More
