Eat, drink, breath, and sleep are just a few things that are part of our everyday lives but there is one thing that is part of our everyday lives that we don't normally think about and that is risk. Now the definition of risk is:
Noun- a situation involving exposure to danger.
Verb- expose (someone or something valued) to danger, harm, or loss.
Now while everything we do doesn't have to be dangerous everything we do does have some level of risk or some level of danger to it, especially when we take into consideration other choices that could be made instead. For instance, I could decide to stay home from work one day because I didn't feel like going into work. That decision carries the risk of getting fired, even if the percent of getting fired was only 10% because of that decision. Regardless, it still carries risk. Each decision we make carries some sort of risk and some decisions and actions we make have much more risk associated to them. Keeping a gun in the house loaded without the safety on and not in a safe carries much more risk of something bad happening than keeping an unloaded gun in a safe with the safty on.
Hopefully you are starting to see how risk is part of our everyday lives. One of the best things we can do is to embrace risk because it is something we must face whether we like it or not. Embracing risk doesn't mean we have to be risky. To be a great investor, embracing risk means that you are aware of it and that your portfolio is investing correctly for the amount of risk that you feel comfortable with. The majority of the most respected financial professionals suggest a highly diversified portfolio for long-term investing in order to lower the amount of risk your portfolio will take on. Don't worry about risk just do what you need to do to beat risk!
As long as you start early enough retirement is typically about long-term investing. You should be looking for some great long-term investing options. Currently, the biggest items in retirement accounts are stocks and bonds. Stocks aren't a bad option for long-term investing. You can diversify your stocks and bonds but you still are only invested in stocks and bonds. A way to truly diversify your retirement portfolio is to invest in things outside of stocks and bonds. Diversifying in things other than stocks and bonds can be hard because many custodians (custodians generally tend to be large and reputable firms, like fidelity or smith barney) don't allow for these other types of investments. The main reasons they don't allow these types of investments is because it isn't their expertise or because they make more money by pushing other investment types to you. If you would like to really diversify your account by being able to invest in things like real estate, private placements, real gold or other precious metals all within an IRA or 401k account you can. In order to do that you need to work with a custodian that allows those types of investments. Accuplan Benefits Services allows you to invest in these non-traditional investments. If you are looking to truly diversify your portfolio contact us today for more information about how you can invest in real estate, gold and more.
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Author: Nick Barker