The second component of developing an investment strategy involves assessing the client's tolerance for risk (defined as the potential loss of value of assets). Unfortunately, all investments involve risk and there are no investments combining high returns with low risk. Our goal at this stage is to identify the proper balance of risk versus return that will allow the client to meet their financial objectives while at the same time remaining reasonably comfortable during volatile market environments. Finding this balance is critical because it reduces the chances that the plan will be abandoned prematurely.

We utilize a risk assessment questionnaire to help each client explore his/her feelings towards investment risk. We also provide education regarding how markets and asset classes have performed historically in various market environments, which helps our clients determine a level of risk that is comfortable for them.