The Verus Team

Separating Conservative from Boring

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

Is it fair to be criticized for being conservative in providing financial modelling forecasts?  When assessing the amount someone spends (choose a higher number), or measuring potential returns or outcomes (pick lower returns), is it wrong to be conservative?

Does being conservative mean that your life or lifestyle will be boring?  Does it mean that based on those forecasts and outlooks that one can’t enjoy their life, and they now have to assume modest or inferior means? 

Or could it be an attempt to provide a manageable baseline that can properly set reasonable expectations, and allow someone the opportunity to plan more objectively based on potentially higher expenses and lower returns?  Could it possibly be empowering and even more fulfilling to have a comfortable starting point with the potential for upside / outperformance through either real lower expenses, or real higher returns?

When operating in an unpredictable and volatile world, is it better to select higher returns for potential future outcomes and lower overall expenses?  Does it feel better to operate under these potentially aggressive and harder to obtain expectations? 

While it’s exciting to think about how life will be if you hit the $300 million Powerball lottery, it is a real long shot.  It is easier though, for some to get sucked into the enthusiasm around more aggressive expectations and all that the future will bring with those loftier numbers.

The challenge with that approach however, is that no one knows the reality of the future until it is actually happening.  Imagine the potential satisfaction with not only having some reasonable base plan, but the additional potential gratification when things track better. 

No guarantees, but certainly a path we would rather travel when compared to failing to reach more aggressive forecasts.  Also, life’s journey is probably a little less stressful when you have a more conservative outlook on things when it comes to your money.

This is why we will continue to provide conservative forecasts and modelling.  Not because we are trying to be boring, but because we want to do our job in helping people address their needs, wants, and goals with pragmatism and thoughtfulness. 

We believe, there is nothing boring about helping people do that over the long-run.

Listen to our podcast:


Please note future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions.