Grand Rounds: Feeling Lucky Punk? The Game of Risk
For an audio version of this post, please click on the speaker icon (top left).
Welcome to this session of grand rounds, a collection of posts I have discovered in the blogosphere and have found of interest and hope you do too.
This offering of Grand Rounds looks at articles from around the web that deal with the perils of investing.
One of the hardest things an individual faces when he or she first decides to start investing is exactly that, how to start.
There are so many options out there, from stocks, bonds, real estate, and other alternative asset classes that you can indeed suffer from analysis paralysis and end up doing nothing (I suggest the first step is to create an Investment Policy Statement and then create an Asset Allocation model you are comfortable with.)
Financial Residency throws in his 2 cents and does a wonderful primer to help you help digest the vast world of investing in, “How To Narrow Down Your Investment Choices.”
In 2019 I decided to de-risk my portfolio as I am within my 5 year pre-retirement window.
Even though it was a sound, logical decision, there is always a bit of FOMO playing in the back of my head.
So it is always great to have positive reinforcement that de-risking in this time period is truly the way to go.
I was therefore happy to read a post by FI Physician titled, “A Conservative Asset Allocation For Sequence Of Return Risk,” that provided great insight and analysis.
It is so easy to get caught up in real estate offerings on various crowdfunding platforms or even private syndications.
Our eyes natural tend to gravitate to the bottom line which is presented as the IRR (Internal Rate of Return).
It seems a large enough IRR can entice us to the point where we jump in without due diligence.
This can lead to your downfall.
Debt Free Doctor gives an unfortunate and cautionary tale of his experience in, “RealtyShares- What I Learned From Losing $50,000.“)
I started out my blog by chronicling every mistake I made.
I felt that this would let my readers know that I am not infallible.
More importantly, I wanted to convey that all of these mistakes served as teaching points for me, which allowed me to achieve the success I currently enjoy.
Well I am not alone as Peter Kim, of Passive Income MD, was kind enough to share some bad decisions he made in 2019 in, “Worst Financial Decisions of 2019.”
Just like when your are landing an airplane, you want to glide into your retirement and avoid a choppy descent.
Unfortunately a portfolio that has a high percentage of equities brings with it volatility you want to avoid right before you enter your golden years.
It is vital therefore to consider de-risking your portfolio as your retirement date approaches, lest you end up with a landing you cannot walk away from.
Fortunately FI Physician gives you a flight plan to follow in, “Pre-Retirement Glidepath: De-Risking Your Portfolio.”
Hope you enjoyed the reading material.
Have a great rest of the week.
If you are in search of financial help, please consider enlisting the service of any of the sponsors of this blog who I feel are part of the “good guys and gals of finance.”
Even a steadfast DIY’er can sometimes gain benefit from the occasional professional input.
NOTE: The website XRAYVSN contains affiliate links and thus receives compensation whenever a purchase through these links is made (at no further cost to you). As an Amazon Associate I earn from qualifying purchases. Although these proceeds help keep this site going they do not have any bearing on the reviews of any products I endorse which are from my own honest experiences. Thank you- XRAYVSN