It’s crucial to ensure your investment strategies align with the current market while also aligning with your personal investment goals. However, people may overlook the importance of mitigating catastrophic risk when putting together an investment strategy. A CERTIFIED FINANCIAL PLANNER™, or CFP® professional can help with that.
Identifying areas of catastrophic risk and taking proactive measures to minimize your exposure is key to preserving your financial health. It’s the job of a CFP® professional to manage your investment strategy in a way that protects you down the line, should the unthinkable occur.
How to Identify Catastrophic Risk
Catastrophic risk can materialize in an array of circumstances – from natural disasters to a decline in the real estate market. For example, young adults (especially in their 20’s) typically have a lot of debt compared to the assets they have. This puts them at a higher risk of default if things take a turn for the worst.
Another example we see quite often is a client is given significant compensation in the form of the employer’s stock. Think about it this way – when you are given stock, a very large portion of your net worth lies in the company’s performance. Now your salary and investments are tied to your employer. Should the company thrive, so will you! But should the company fall upon challenging times, the losses you could face could completely change your financial standing.
A CERTIFIED FINANCIAL PLANNER™ will look at your financial well-being many different ways. They will look for threats and identify opportunities to protect you against the unexpected. Identifying and mitigating risk is imperative to your overall wealth management strategy.
How can I Minimize my Exposure?
Building financial resilience is a complicated process. Not only is it essential to utilize financing strategies that efficiently and equitably distribute the risk of catastrophes, but it’s also important to utilize cost-effective risk reduction measures to minimize the effect of future disasters. In particular, we believe that it’s crucial that you have a plan to avoid insurance gaps and develop an investment strategy that has a stock and bond allocation that fits your age and risk tolerance. These, (believe it or not), are likely far more important than returns when it comes to protecting your investment portfolio and managing your wealth.
Regardless of your situation, it’s imperative to fuse rigorous risk management tactics with your investment strategy. This tactic is crucial to achieve the best outcome, no matter what life decides to throw your way.
CERTIFIED FINANCIAL PLANNER™s Who Put Your Needs First
Your Highlands Ranch financial manager has your back. At Morgan Rosel, we are committed to setting you up for success. With in-depth, research-backed investment strategies tailored specifically to your financial goals combined with extensive experience and expertise, you can rest assured that all your wealth management needs will be met with us.
This commentary reflects the personal opinions, viewpoints and analyses of the MorganRosel Wealth Management, LLC (“MRWM”) employees and guests providing such comments, and should not be regarded as a description of advisory services provided by MRWM or performance returns of any MRWM Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. MRWM manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results. MRWM may recommend the services of a third-party attorney, accountant, tax professional, insurance agent, or other specialist to clients. MRWM is not compensated for these referrals.