An Introduction

Hi. Welcome to BourGroup and my blog. Phil

Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.

I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.

"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.

Tuesday, April 12, 2011

The Risk Conversation

According to several studies, individual investors are still fearful of stock (and bond) markets and may be more conservatively positioned than they should be for their age and time horizon. Stocks and bonds do hold many varied and legitimate risks to be considered.

Risk tolerance, though, should not be as much a matter of how you feel about the risks of the markets but rather of your personal:

  • Risk Capacity = your ability to withstand losses; for example, because:
        •  your time horizon is long,
        •  your income needs are being met by other sources, or
        •  your emergency funds are in "safe" money and sufficient
  • Risk Need = the amount of risk required to meet your goals and still:
        •  meet or beat inflation, and
        •  overcome the tax burdens
 Many risk questionnaires do not measure your capacity or need to take on risk.
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