What is Real Risk?
by Steven Sivak, Innovate Wealth
In the investment business we spend a lot of time talking about risk. As it applies to portfolio construction and management it is a decades-long debate: how to structure, how to measure, how to optimize. Academics and asset allocators keep the debate going each and every day, testing and honing their models in hopes of finding even the slightest of edges.
But…that’s not real risk.
Emergency Funds. Yes, They’re Boring. But Do You Actually Have One That’s Big Enough?by Meg Bartelt, Flow Financial Planning, LLC
You cannot cruise the internet without tripping over articles about the partial government shutdown and the increasingly horrible effects it’s having on many government workers and their finances and their psyches.
The whole situation is doing a marvelous job of illustrating that you do not want to have only a little bit of cash in the bank. You want quite a lot in order to survive the crap life can throw at you. And in the tech industry, I bet you can think of a few such pieces of crap.
Enter the Emergency Fund.
"Risk-Free" Investments Don't Exist
There’s a kind of trite saying attributed to most financial advisors in the world: There’s no such thing as a risk-free investment.
Like most trite financial advisor sayings, this is TRUE. But it does take some consensus on how we define two things: Investment and Risk.
Meriam-Webster’s Dictionary has several definitions for risk. One of them is: ”the chance that an investment, such as a stock or a commodity, will lose value”.
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