This question is designed to educate clients regarding the many dimensions of risk, including the risk of losing their standard of living or not meeting their goals, and the risk of not sleeping well (i.e. market volatility). The 1st two items address the issue of returns. We emphasize that their goals are accomplished by earning an appropriate real rate of return, not by earning an arbitrary fixed target return. Item 3 helps clarify for the client that short term volatility is a reality that he has to live with.
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