Just as there is a difference between being able to afford a luxury car and actually buying a luxury car, there is a difference between being able to afford high investment risk, and choosing a high investment risk portfolio. Indeed, there is much comfort in knowing that we can afford a luxury car while enjoying a modest one, and there is tranquility in knowing that we can bear high investment risk but only need a portfolio with low or moderate
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Insights
The Risk You Need vs. The Risk You Can Afford
The Uncommon Average
“I have found that the importance of having an investment philosophy—one that is robust and that you can stick with— cannot be overstated.” -David Booth The US stock market has delivered an average annual return of around 10% since 1926.1 But short-term results may vary, and in any given period stock returns can be positive, negative, or flat. When setting expectations, it’s helpful to see the range of outcomes experienced by investors historically. For example, how often have the stock
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