The biggest challenge confronting any investor is balancing risk management and growth potential.


Many investors build their investment portfolios with one goal in mind - to make as much money as possible.  In doing so, they often take on far more risk than they intended - often without realizing it - and suffer severe losses during market corrections.  Unexpected risk is the number one reason investors abandon their investment strategies and fail to achieve their financial objectives.  That is why so much of what we do focuses on reducing risk in your investment portfolio.


During bear market corrections, many investors typically will bail out of the market at some point after their risk tolerance is exhausted.  They wait until they cannot stomach any additional losses - typically after stock prices have already fallen precipitously - and then sell at the worst possible time - near the bottom of the market correction.  And to compound this problem, during the bull market rallies that follow, many investors typically will buy into the market at some point after they can no longer stomach missing out on any additional gains - typically after stock prices have already risen significantly - and then buy at the worst possible time - near the top of the market rally.


If you cannot tolerate the historical drawdowns (losses) of the investment portfolio that best accomplishes your financial objectives, then you won't stick with the plan - so it really doesn't matter what the "best" investment portfolio is - and it's time to change your financial objectives.  On the flip side, if you determine that you are comfortable with your investment portfolio - even in its darkest moments during historical drawdowns (losses) - then there is a much greater likelihood that you will stick with your plan and enjoy long-term success.

Stress-Test Your Investment Portfolio

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Summary

Conduct A Worst Drawdown (Loss) Analysis

We have found that evaluating your attitude toward drawdowns (losses), in terms of both percentages and dollars, is the single best way to assess if you will - or if you will not - have enough conviction to stick with an investment plan and harvest long-term wealth through bull and bear markets. 


This methodology goes a long way to helping us - help you - construct an investment portfolio you can tolerate through good times and bad - that will maximize the probability of you sticking to a plan to achieve your long-term financial objectives.  We will be happy to provide you with a Free Portfolio Stress-Test for your current mutual fund and/or ETF portfolio - to review how it would have held up when you needed it most - during previous bear market corrections.


   Free Portfolio Stress-Test (Mutual Funds and ETFs)

To request a Free Portfolio Stress-Test for your current mutual fund and ETF portfolio, please call us at 203.452.8100 or 866.479.3258 or email us via the Contact Us tab.