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Bautis Financial

Bautis Financial

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Fearless Investing

What is your Risk Number? Find Out

Putting risk first is the key to unlocking fearless investing – but is all risk the same? How do we reconcile risk tolerance with risk capacity?  Fearless investing means having both the confidence and the ability to stick with a long-term strategy, armed with the right support and the right expectations.  In order to do that, we’ve got to analyze the four types of investment risk:

How Much Risk Does the Investor Want?

This measure of risk is purely based on client preference created from the client’s responses in a risk assessment tool.  Our definition of risk tolerance is this:

“How far can a portfolio fall, within a fixed period of time, before the investor will capitulate and make an emotionally-charged, poor investing decision?”

How Much Risk Does the Investor Have in Their Portfolio?

An analysis of the current portfolio can tell how much risk the investor currently has and what the portfolios strengths and weaknesses are

How Much Risk Does the Investor Need to Reach Their Goals?

We all want to retire someday and that’s where the analysis of how much risk the investor needs to take comes into play.  Either the investor is on track, or needs to make some adjustments to meet their long term goals.

How Much Risk Should the Investor Take On?

As an advisor we align every factor above to propose the right portfolio to our client.  We empower fearless investing by ditching the narrow targets of the past and adopting a model that includes a clear and realistic range.

Stress Tests

Investors have questions and concerns around a central theme: “how would my portfolio perform if ____________ happened?”  With our stress test tools, we have the capability of seamlessly depicting the effects of these scenarios. You can learn how hedged a portfolio is against interest rate swings, market collapses, etc. The stress tests are not simply a rear view mirror or historical snapshot, but display how the portfolio would likely perform, in the future, if a similar market period were experienced.

 

Risk/Reward

The Risk/Reward Heatmap quickly shows you the relative risk and reward that investment choices are adding to the portfolio,, and is also a great way to quickly glance at the underlying data that is used to produce the overall risk analytics. By using the Risk/Reward Heatmap, you can see a visual representation of the potential risk (red bar), potential return (green bar) and the amount of risk that is diversified out by inverse correlations (gold bar), given the data model selected.

When advisors aren’t afraid to talk about risk, investors aren’t afraid to make the right decisions.

What is your Risk Number? Find Out

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Bautis Financial
7 North Mountain Ave
Montclair, NJ 07042
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862-205-5800
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