What Does Risk Mean? Isn’t The Stock Market Risky?


What Does Risk Mean? Isn’t The Stock Market Risky?

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Risk is the possibility of a loss.  There are quite a few types of risk when it comes to investing.  The level of risk you are willing and able to take is different from the next person.  However when it comes to your retirement savings, the greatest risk you have is outliving your money, so you have to take enough risk to be successful.  We believe that the stock market is the most appropriate place for most people to save for their retirement. The stock market goes up and it goes down (often), but historically it has gone up far more than it has gone down.  Each time there’s been a downturn, there has been impressive strength and recovery in the market following. So why does the stock market seem risky? Partly because it’s really tough for our brains to think long-term. And partly because we’ve all been educated by the national financial news media, whose job is to sell advertising, not to tell you the truth or to educate you.  They need drama and fear. So we invite you to turn that off and just ignore it if you can.

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InvestingErica Hartwick