Why do you save and invest? Are you on track to have enough to retire when you want, and continue to live the lifestyle you are accustomed to? In addition to long-term goals like funding your retirement, you may have more intermediate goals like saving for your children’s education to help them avoid crippling student loan debt. You may also have shorter-term goals such as buying a new home.
To achieve these goals, you need a strategic plan, customized for your unique circumstances. A critical component of your plan is an intimate understanding of risk and how it can work for, or against you. It turns out four-out-of-five investors have more risk in their portfolios than they previously realized. What is the optimal amount of risk to take or avoid? How do your investments work together to formulate a comprehensive strategy predicated on your individual risk tolerance? You should expect your advisors to utilize their risk management expertise to help you answer these important questions.
Our Risk Analysis Process
OJM Group uses Riskalyze, a cutting-edge technology built on decades of academic research that quantifies an investor’s risk tolerance in a unique and innovative way. With this tool we can:
- Translate risk tolerance into a math-based Risk Number
- Identify your acceptable levels of risk and reward with unparalleled accuracy
- Ensure your portfolio aligns with your investment goals and expectations
1. Capturing Your Risk Number
The tool starts with a five-minute questionnaire that covers topics such as portfolio size, top financial goals, and what you’re willing to risk for potential gains. From your responses, Riskalyze will pinpoint your exact Risk Number.
2. Aligning Your Portfolio
After pinpointing your Risk Number, we’ll craft a portfolio that aligns with your personal preferences and priorities, allowing you to feel comfortable with your expected outcomes. The resulting proposed portfolio will include projections for the potential gains and losses we should expect over time.
With Riskalyze, we can visualize the risk and reward profile for each individual investment we propose for your portfolio. Illustrating risk, reward and diversified risk gives us a powerful tool to review before we make any final investment decisions. We can stress test illustrate your proposed portfolio to see how it would have fared through various market events over the past eight years, including the financial crisis and recovery.
3. Meeting Your Financial Goals
Advisors with your best interests in mind should help you create a comfortable path to achieving your goals, while keeping your defined risk tolerance in mind. Your OJM Group wealth advisor will regularly review your progress toward your financial goals, evaluate your portfolio’s alignment with these goals, identify opportunities and make recommendations for conscientious changes in saving and investing when appropriate.