Last week's surge in the S&P 500 volatility, falling 5% on a combination of last Wednesday and Thursday's closing, has many investors suddenly concerned about their equity holdings.
This will be a reoccurring pattern as the market makes it's inevitable swings. The long bull market of over 9 years has created an environment where many clients have come to expect positive returns year-in, and year-out...losing sight of their risk capacity...and (temporarily) increasing their risk tolerance.
Your risk tolerance is quickly snapped back into reality with a few negative weeks in the market...but your risk capacity is substantially set (unless you win the lottery...call us if you do!), and unlike your risk tolerance, cannot easily be snapped back into proper alignment after the market has already suffered a significant drop.
Don't be caught with more risk in your portfolio than you can tolerate...financially or emotionally. We have the tools and experience to help you understand both your risk tolerance and risk capacity, call us if you have concerns.
Dave + Drew
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