The Verus Team

Are You Considering All the Risks?

Written by: Derek Majkowski. Any opinions are those of Derek Majkowski and not necessarily those of RJFS or Raymond James.

Risk by definition is a situation involving exposure to danger.  In the world of finance and investments, risk can be broken down into several different categories.  Here are some common risks we will often discuss pertaining to someone’s money and investment portfolios:

  • Financial
  • Credit
  • Interest Rate
  • Purchasing Power
  • Exchange Rate
  • Company
  • Country
  • Geopolitical
  • Political
  • Market
  • Tax

Often those listed above are very specific to an investment portfolio, and usually a topic that most people can easily grasp when discussing risk.  But what about some of the other risks that could have a significant impact on your ability to sustain your livelihood, or maintain your long-term wants and goals?  Do we spend enough time or place enough attention on properly weighing those risks as well?

When considering a true and comprehensive financial strategy, it is important to also consider some of these below listed risks as well:

  • Health
  • Longevity
  • Liquidity
  • Liability
  • Disability
  • Estate
  • Property

Often we can spend a significant amount of time getting somewhat myopic with the risks associated with our personal investment portfolios that we lose sight of those bigger risks that could completely derail our overall financial needs, goals, and wants.  It is extremely important to not only review your investment portfolio risks, but also those areas that could potentially have a much more devastating impact on how we conduct ourselves from one day to the next.  Failing to thoughtfully address those potentially life-changing risks, can make someone’s investment risks moot. 

Why?  Well because you will most likely need to utilize those investments sooner in order to address the costs associated with the exposure to one of these other ignored risks.