Unveiling the Hidden Risks: Understanding Volatility in Your Portfolio

When you pursue shelter from volatility, it often seems as though you’ve eradicated “risk” from your portfolio.

In truth, the likelihood is slim that you have eradicated risk; instead, you’ve merely transferred the risk to the future.

Here’s the breakdown:

(1) Reduced volatility = Diminished Long-Term Return

(2) Diminished Long-Term Return = Reduced Probability of Attaining Your Objectives

(3) Reduced Probability of Attaining Your Objectives = Heightened Risk

Many investors fail to recognize this tradeoff.

In essence, avoiding volatility is far “riskier” than commonly perceived.

This material is for informational purposes only. It is not intended as and should not be used to provide investment advice and is not an offer to sell a security or a recommendation to buy a security.

Russ Kefauver is an Accredited Wealth Management Advisor℠ and Chartered Retirement Planning Counselor℠ with over fifteen years of financial planning experience.