Return is only part of your financial equation

Managing risk is the key to financial success

Just as most conversations about financial planning quickly turn to talk of investments, conversations about risk are usually reserved for the discussion of market uncertainty. For most people, financial risk is synonymous with market risk. However, this is not the case. Just as a financial plan is more than simply investments, the financial risks we face consist of much more than just the market risk you are familiar with.

Unfortunately, ignorance of the other risks we face in our financial lives tends to lead to more long-term financial problems than are encountered with a “bad” market. The universe of risk that can affect your financial plan is vast. In fact, market risk will most likely have the least impact over time if your assets are properly allocated, diversified, and part of a comprehensive financial plan.

While many advisers and clients focus solely on market risk, other, more insidious risks are waiting to sabotage their financial security. Do you know how inflation, longevity risk and sequence of returns risk will affect your financial future? These are just a few of the many potential threats which could impact your long-term financial security.

Risk management is an extremely important part (in my opinion – the most important part) of the financial planning and advisory process.   Understanding and managing the multitude of potential risks that we will face will be the difference between financial success and potential failure.

Have you addressed more than just market risk in you financial plan?  If not, it might be a good time to take another look.

Give us a call today at (732) 875-0100 to schedule your NO OBLIGATION financial plan and portfolio review. Understanding your risk is the first step to managing it.

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David J. Seibel is founder and Managing Partner of AGS Aurora Financial Services LLC (www.agsaurora.com), an independent financial advisory firm in Matawan, New Jersey. You may contact him by email at david.seibel@agsaurora.com.

Investment Advisory Services offered through Global Financial Private Capital, LLC an SEC Registered Investment Advisor