Maybe you have seen them from your broker...those online surveys that are supposed to help you decide on your asset allocation based on your risk tolerance. Maybe you should think twice before using them. As the U.S. Securities and Exchange Commission (SEC) puts it, "While the suggested asset allocations may be a useful starting point, keep in mind that the results may be biased towards financial … [Read more...]

At the risk of getting philosophical, I am going to talk about risk, uncertainty, and the difference between the two. It matters. How you make decisions in your life is greatly influenced by whether outcomes are risky or uncertain, and how you make choices when considering each. Both risk and uncertainty involve unknown outcomes, but risk is unique to statistical theory. Risk includes a … [Read more...]