What is Risk Tolerance when investing in todays Canadian Financial Markets?

If the highest aim of a captain were to preserve his ship he would keep it in port forever – Thomas Aquinas

Risk tolerance is something that each individual investor must assess before making any investment. All investments have an element of risk. The higher the potential gain, the higher the risk. The basic question is “how much are you prepared to lose”. If the answer is “nothing”, then as Thomas Aquinas said, you will keep your ship at port forever.

There is 1.6 trillion dollars invested in Canada. Of that 1.1 trillion is currently in safe harbor, like T-bills, money market funds, GIC’s. What that says is the majority of people are risk intolerant and they are afraid of the future regarding their investments.
This fear prevents people from making an investment in the first place!

A recent study in the US determined that women make better decisions regarding risk than men do. Women ask more questions, require more information, and generally study the issues totally before making a decision. Warren Buffett has been accused of “investing like a woman”. Would that we all could be accused of investing like a woman. Warren Buffett is worth in excess of 50 billion, his investment strategy has served him well.

We sometimes don’t ask questions for fear of showing our ignorance. We don’t study the issues because we don’t know where to start!

Staying in safe harbor forever will not get you ahead. Knowing and understanding the risks gives us greater tolerance to take some risk. Diversifying the risk is the key.

The products that I have are designed to diversify and change the risk that your portfolio is subjected to.

Don’t be afraid to ask!

Dave Meidl
Kelowna Financial Advisor
Intent Market Solutions
www.intentmarketsolutions.com
250-575-3576
Investing with Purpose