CONTACT US
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Craig Lundquist, MBA, ChFC®, CRPC®
VP of Wealth Management
651-773-2757
Kristin Becker
Senior Administrative Assistant
651-773-2821
Ideal Wealth Advisors
Located at Ideal Credit Union
8499 Tamarack Road
Woodbury, MN 55125
CRPC conferred by College for Financial Planning
July/August 2024
How Much Risk Can You Take
Whether your dream is to climb Mount Everest or sail the Caribbean in a pontoon boat, the amount of risk you feel comfortable with is different for everyone. That applies to investment risk, too. But how can you find your comfort level?
Your Risk Tolerance
Risk refers to market conditions that can negatively affect returns. Risk tolerance is your ability to accept the possibility of investment losses. Taking greater risk with your investments offers the potential for higher returns, but it also exposes your portfolio to substantial losses if the markets take a downturn. However, not taking enough risk can prevent you from earning returns that will help you reach your goals.Types of Investors
Investors generally fall into three categories based on their tolerance for investment risk.Aggressive investors are willing to accept more risk of investment losses in exchange for the potential for earning higher returns. Their portfolio typically holds equities and commodities, with little or no exposure to bonds or stable value investments.
Moderate investors are willing to accept periods of market volatility in exchange for the possibility of earning returns over time that significantly outpace inflation. Their portfolios typically consist of a mix of equities and income-producing investments, such as bonds.
Conservative investors accept little or no volatility with their investments. They seek income and capital preservation. Their portfolios hold investments that are highly liquid (i.e., can easily be turned into cash), such as certificates of deposit, money market accounts and U.S. treasuries.
Your Time Frame
Risk tolerance can change based on your age, goals and time horizon. Investors in their 20s, 30s and 40s generally can take more risk with their investments because they have many years before they’ll need their savings. As you get closer to retirement, you may want to shift some higher risk investments into less volatile, income-producing assets. Keep in mind, though, that keeping a portion of your portfolio in equity investments can provide a hedge against inflation.Your financial professional can help you design a portfolio based on your goals and risk tolerance.
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Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Ideal Credit Union and Ideal Wealth Advisors are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using Ideal Wealth Advisors, and may also be employees of Ideal Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of Ideal Credit Union or Ideal Wealth Advisors. Securities and insurance offered through LPL or its affiliates are:
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