Many financial advisors will ask you how much risk you think you can tolerate, but do you know how to answer this question in a clear and useful way? As the peaks and valleys of the market can cause your investment values to fluctuate, you need to know what level of risk is appropriate for your investment horizon. The Riskalyze platform analyzes your data and creates a “risk number” that serves as a guidepost as we assess which investments match your current needs.
Six Fundamental Financial Planning Considerations
Our six fundamental financial planning considerations are potential barriers investors may face when working toward their goals. We believe that it’s important to evaluate investor sentiment towards each consideration through a succinct questionnaire. This allows us to examine the potential effects of these considerations on an investor’s assets today and in the future.
Longevity
Outliving financial assets as the result of a longer life
Liquidity
Limited access to assets to meet life’s unexpected financial needs
Inflation
Reduction in real purchasing power as the result of increasing cost of living
Market
Unexpected reduction in the value of financial assets at the time of withdrawal
Mortality
Loss of financial assets as the result of a partner’s or spouse’s death
Taxes
Decreasing income and assets and/or the impairment of legacy assets from increasing taxes
Value at Risk (VaR) Analysis
Within the initial review, we help investors understand their risk threshold. We do this by deploying a Value at Risk (VaR) Analysis that helps us quantify attitudes toward financial uncertainty, specifically one’s emotional tolerance with respect to the magnitude and speed of potential investment loss.
This Analysis produces a VaR Score that is indexed on a scale from conservative to aggressive. The VaR Score can help us determine if the current portfolio aligns with the investor’s risk tolerance and provides insight as to whether changes to that portfolio are needed.
