When I went to FinCon in Charlotte last year, I talked with a lot of companies. However, there were very few that I connected with. It felt to me that so many companies were simply doing the same thing such as online banks and personal finance managers. Those are great, necessary tools, but I like to tell the story of companies that are unique. Sometimes these unique companies highlight a problem that most people haven’t thought of.
FinMason is one such company.
You might have noticed that the stock market hasn’t done so well over the last month. After years and years of the bull market giving us stock market gains, it looks like we might endure a correction, or worse, a recession. It’s easy to invest when your money grows. It’s a little more difficult when you watch your money disappear. While I focus on accumulating shares, other people may get nervous and sell. I believe that can be a mistake because it leads to people buying high and selling low… a mathematically proven way to lose money.
So what’s the solution?
Know thyself. It’s easier said than done. Most people think they’d act one way, but in the heat of the situation act a different way.
FinMason has a calculator that can tell you what your true risk tolerance is. They can plot it on a scale of 1 (Connie Conservative) to 100 (Risky McRiskington). There’s nothing wrong with being on either end of the scale. The difficulty comes in when you are in investments on the opposite end of the scale of your personality. If you are Connie and you are in risky investments, this kind of downturn can be quite problematic. If you are Risky, but invest in conservative investments, you may be disappointed in the lack of growth of your portfolio.
Kendrick Wakeman, the FinMason CEO, put it best… it’s like matching up shoes (investments) with your shoe size (risk tolerance).
The calculator below should take you about 3 minutes to complete… maybe less. Once you enter a little information, you choose a from a couple of different options just like how an optometrist switches between lenses in an eye exam to fine tune your prescription for you. Once you select what looks best for you, they’ll present you with a real portfolio that matches it.
Note: When you get to the end of the questions, you’ll want to scroll back up for the results (which come in a pretty graph).