How Risk Tolerance Relates To Investment Goals

by | Jul 27, 2021 | Financial Services

A critical factor for any retirement plan developed by Matt Dixon, Registered Financial Consultant, is to correctly match the investment plan with the risk tolerance of the client. Unfortunately, not all financial advisors and planners do this, which results in the investor losing trust in the recommendations from the professional.

Everyone in Greenville, SC, has a different level of comfort with risk. However, with any type of investment, the lower the risk, the lower the potential for earning significant rewards. Knowing how to structure retirement planning based on risk tolerance and years to contribute to a plan is just one of the specializations Matt Dixon brings to the table.

Age and Risk

In general, the younger the investor, the lower the concern about risk in an investment. The lower concern about risk is due, in part, to the number of years the individual will continue to work to add to the fund.

At the same time, older individuals in Greenville, SC, tend to do better with lower-risk investments. Low-risk investments recommended by Matt Dixon are stable and have limited volatility in any market. While they may decrease or increase in value over time, the risk of a loss of investment is extremely low.

Diversified Portfolios

One simple way to avoid concerns about risk in any portfolio is to diversify investment. Having different portfolio allocations across various investment options eliminates the problem of relying on one type of investment.

Knowing how to reduce taxes, take advantage of deferred taxes, and diversify a portfolio to reduce risk are all services provided by top financial consultants.

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