Assessing Your Risk in the Current Economy

Amidst interest rate hikes and inflation, what kind of risk do you need to weather through it? What’s a possible solution?

As interest rates and inflation rise, is now the time to take defensive action in your portfolios? Should you move your money into more conservative investments like cash and bonds? Is it too late to go through that de-risking process?

Brian says to not apply general advice to everyone. It depends on how much risk you are willing to accept in order to figure out your next steps. Assess your risk and make sure it’s properly aligned with your risk tolerance. If you’re a DIY investor, you might be surprised to find you are taking more risk with your investments than you claim you’re willing to take. If you’re on the right track with your investments, you won’t be as panicked when the market goes down.

A new survey finds less than half of the next generation of retirees feel optimistic about the economy. They feel low-interest rates paired with rising inflation makes it feel hard to find an income stream to last their lifetimes. Is an annuity the answer? Brian points out that the survey was done by an insurance company that sells annuities. There are some annuities that are a fit for people, but many of them are not the right solution.

Do you understand the pros and cons of the annuity you’re considering? Where are you getting the information from, and do they have a vested interest in selling you an annuity? How does it impact your overall financial plan? All of these things should be thought through before making a major financial decision.

Listen to the entire episode or skip ahead using the timestamps below.

Honest Takes:

[0:12] Should you go through a de-risking process?

[6:07] Are annuities the answer?

Today’s Truth:

“The more folks get, the more conservative they get.”

Brian Bowen

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