1. Last week we talked about risk and how it’s misunderstood. We pointed out that your biggest long term financial risk was failure to build your wealth + investing enough for retirement.
2. There are many risks associated with investing. Most are so far-fetched that they are very unlikely to happen.
3. One is what we call a “black swan” event where something pops up that was completely unpredictable or unexpected.
4. For the most part this kind of event happens once in a generation or never.
5. Don’t let the worry about something that may never happen keep you out of the market.
6. The more extreme the prediction or worry, the less likely it will occur.
7. The worst thing you can do is to position your investments for some kind of purported catastrophe that may never happen.
8. The worst case scenario never happens.
9. Fear mongers who predict financial disasters sell a lot of newsletters and books, but are of no use investing-wise.
10. They predict hyper-inflation, currency collapse, stock market crashes, food shortages, wars, and political or social chaos. The threats are endless and they are always just around the corner.
*Investing involves risk including the potential loss of principal. Past performance is no guarantee of future results.