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Do You Know How Much Risk Is In Your Portfolio?

Do You Know How Much Risk Is In Your Portfolio?

The markets have been upsetting this year if you’re an investor. While the S&P 500 gained 1.53% in May, that brings the market to where it was about one year ago. Thanks to fluctuating oil prices, China’s volatile markets, and speculation about another Federal interest rate hike, the markets have been a roller coaster for the first half of 2016.

In light of all of these ups and downs, many people are reassessing how comfortable they are with market risk. How about you? As you age and your assets accumulate, are you willing to take on as much risk as you were 10 or 20 years ago? More importantly, does your portfolio accurately reflect your risk tolerance?

What Is Risk?

All investments involve risk. Some risks are avoidable; some are not. Avoidable risks are those that take place when your portfolio leans too heavily on stocks or bonds that have been unstable in the past or when your holdings are not diversified enough. For example, you may be putting too much of your company’s stock in your 401k plan. Or you have too many overlapping US stock mutual funds, instead of being more globally diversified. Avoidable risks often occur when we underestimate risk and believe we can tolerate more than we actually can.

On the other hand, unavoidable risks are those that occur because our world is ever-changing, volatile, and we can’t predict everything. As much as we wish we could, unavoidable risks are are simply out of our control. This type of risk includes unfortunate events like geopolitical issues and terrorist attacks.

The third type of risk is often unseen, but that can impact your portfolio just as intensely as an obvious risk: the risk of being too conservative and not meeting your future goals. By overestimating risk and trying to avoid loss at any cost, you could be unintentionally sacrificing your future dreams.

How We Can Help

Research shows that four out of five investors have more risk in their portfolio than they realize.* This excess risk can subject them to greater losses in market downturns. Every investor’s risk preference is different, based on their unique situation and personality. It is important to understand your personal risk preference so that you can ensure that your portfolio reflects it and you aren’t caught off guard. Do you know your risk number? Check out our online risk assessment tool to see where you stand today!

Once you know your unique risk number, it’s time to make sure your portfolio is aligned with it. Get the conversation started with Mason & Associates. Your first meeting is always complimentary and commitment-free. Give our office a call at (323) 254-3072 or email us at This email address is being protected from spambots. You need JavaScript enabled to view it. .

About Brent

Brent M. Mason is the President of Mason & Associates, Inc.  Brent began his career in 1999 with Putnam Investments, where he was a vice president and served as the marketing manager for Putnam’s Insurance Products Division, specializing in the development and sale of investment vehicles within insurance related products. Brent earned a Bachelor’s Degree in Business Administration from Southern Methodist University, in Dallas, Texas where he focused on marketing and finance. Brent is a licensed California insurance agent and can offer life, health, variable and long-term care insurance products. Currently, he is a member of the Board of Directors at Hillsides, an organization that specializes in meeting the needs of at-risk children in the greater Los Angeles area. Brent lives in Pasadena with his wife Leah and their three beautiful children. He enjoys golf, snow skiing and spending time with family and friends.

*Research by Riskalyze, LLC

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A Market Correction is an Opportunity

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