Comments on: From the Front Lines: Changing Your Risk Tolerance Based on a Bear Market http://genxfinance.com/from-the-front-lines-changing-your-risk-tolerance-based-on-a-bear-market/ Helping a unique generation achieve financial independence. Fri, 10 Feb 2012 01:03:00 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: ConnieB http://genxfinance.com/from-the-front-lines-changing-your-risk-tolerance-based-on-a-bear-market/comment-page-1/#comment-79584 ConnieB Wed, 16 Jul 2008 15:00:49 +0000 http://genxfinance.com/2008/07/15/from-the-front-lines-changing-your-risk-tolerance-based-on-a-bear-market/#comment-79584 This is an excellent article! Stumbled! This is an excellent article! Stumbled!

]]> By: Sara at On Simplicity http://genxfinance.com/from-the-front-lines-changing-your-risk-tolerance-based-on-a-bear-market/comment-page-1/#comment-79527 Sara at On Simplicity Wed, 16 Jul 2008 02:59:47 +0000 http://genxfinance.com/2008/07/15/from-the-front-lines-changing-your-risk-tolerance-based-on-a-bear-market/#comment-79527 The bear market has been a great way to learn to accept risk. I've really had to come to terms with the fact that drops aren't the end of the world, but ditching my holdings at every drop just might be the end of my portfolio growth. The bear market has been a great way to learn to accept risk. I’ve really had to come to terms with the fact that drops aren’t the end of the world, but ditching my holdings at every drop just might be the end of my portfolio growth.

]]> By: Jeremy http://genxfinance.com/from-the-front-lines-changing-your-risk-tolerance-based-on-a-bear-market/comment-page-1/#comment-79494 Jeremy Tue, 15 Jul 2008 20:08:49 +0000 http://genxfinance.com/2008/07/15/from-the-front-lines-changing-your-risk-tolerance-based-on-a-bear-market/#comment-79494 That's right, Ron. People often confuse market volatility with risk just because it is getting all the media attention. It's funny how people will pitch a fit when they are down 8% YTD and think it's the end of the world, when you look at their account over the past three years and they were making money hand over fist. There will be ups, and there will be downs, and as long as you have a ways until you need the money and keep adding to it, you'll be just fine. The risk that people always forget is the risk out outliving your money, which is very real for most people. If you think losing a few thousand dollars this year is risky, come talk to me when you're out of money at 70 and are forced to work as a Wal-Mart greeter or live off of food stamps. I know that isn't a risk you want to take ;) That’s right, Ron. People often confuse market volatility with risk just because it is getting all the media attention. It’s funny how people will pitch a fit when they are down 8% YTD and think it’s the end of the world, when you look at their account over the past three years and they were making money hand over fist. There will be ups, and there will be downs, and as long as you have a ways until you need the money and keep adding to it, you’ll be just fine.

The risk that people always forget is the risk out outliving your money, which is very real for most people. If you think losing a few thousand dollars this year is risky, come talk to me when you’re out of money at 70 and are forced to work as a Wal-Mart greeter or live off of food stamps. I know that isn’t a risk you want to take ;)

]]> By: Ron@TheWisdomJournal http://genxfinance.com/from-the-front-lines-changing-your-risk-tolerance-based-on-a-bear-market/comment-page-1/#comment-79490 Ron@TheWisdomJournal Tue, 15 Jul 2008 19:39:11 +0000 http://genxfinance.com/2008/07/15/from-the-front-lines-changing-your-risk-tolerance-based-on-a-bear-market/#comment-79490 Great post. People also don't need to confuse risk with volatility, even weekly, monthly, or yearly volatility. The "risk" is that you will see continual declines over very long periods, not ups and downs over the next week, month, or even couple of years. Too many times I hear people say, "Oh, that's a risky investment. That stock has been going down for several months now." That isn't risk! That's volatility! It would be risky to buy bonds from a company on the brink of disaster. It would be risky to buy stock from a company that's weakly emerging from Chapter 11 with no cash on hand. A lot depends on your investment horizon as well. It would be risky to buy XOM with the money you've saved for a down payment on your home when you'll need all that money in two weeks. It wouldn't necessarily be risky to buy XOM with your Roth funds when you're retiring in 30 years. Great post. People also don’t need to confuse risk with volatility, even weekly, monthly, or yearly volatility. The “risk” is that you will see continual declines over very long periods, not ups and downs over the next week, month, or even couple of years.

Too many times I hear people say, “Oh, that’s a risky investment. That stock has been going down for several months now.” That isn’t risk! That’s volatility! It would be risky to buy bonds from a company on the brink of disaster. It would be risky to buy stock from a company that’s weakly emerging from Chapter 11 with no cash on hand.

A lot depends on your investment horizon as well. It would be risky to buy XOM with the money you’ve saved for a down payment on your home when you’ll need all that money in two weeks. It wouldn’t necessarily be risky to buy XOM with your Roth funds when you’re retiring in 30 years.

]]> By: Lisa http://genxfinance.com/from-the-front-lines-changing-your-risk-tolerance-based-on-a-bear-market/comment-page-1/#comment-79486 Lisa Tue, 15 Jul 2008 18:51:11 +0000 http://genxfinance.com/2008/07/15/from-the-front-lines-changing-your-risk-tolerance-based-on-a-bear-market/#comment-79486 Seriously. My (who is very smart normally) is getting caught up in the hype and telling me I should be selling my stocks and buying gold. Talk about selling low and buying high. Other than keeping a larger emergency fund/cash savings, I'm sticking to the basics- fully funding my 401k and Roth IRA and keeping my investments in index funds + a few others. I'm only 25 and have no reason to sell soon so I'm not worried about the current down market. I wish more people would listen to the standard advice. It seems that once emotions become involved and the media and other sources continue to feed the craze- logic gets forgotten. Seriously. My (who is very smart normally) is getting caught up in the hype and telling me I should be selling my stocks and buying gold. Talk about selling low and buying high. Other than keeping a larger emergency fund/cash savings, I’m sticking to the basics- fully funding my 401k and Roth IRA and keeping my investments in index funds + a few others. I’m only 25 and have no reason to sell soon so I’m not worried about the current down market. I wish more people would listen to the standard advice. It seems that once emotions become involved and the media and other sources continue to feed the craze- logic gets forgotten.

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