What is Market Risk?
Market risk is the impact of volatility on your retirement savings accounts, the risk vs. reward of those investments, and the cost of deprivation of asset diversification.
As we discussed in a previous post, the growth needed for recovery from losses when the market drops can be more extreme than most investors realize.
The risk vs. reward of your investments can be referred to as the “Saver’s Dilemma”. Investments with more potential for growth pose a much higher risk and the investments with less potential for growth result in a much lower risk.
For an investor who is closer to retirement, the ideal approach would be to find an asset that has both, balancing growth with protection.
This is called diversification of your retirement assets. Diversification provides investors the opportunity for liquidity in times of need, protection in times of economic slowdown, and growth in times of market recovery.
What is “Market Risk”?
Corey Shevlin
Corey serves as an investment adviser representative and handles the investment related administration for The Lynch Financial Group. He currently holds his Series 65, Life and Health Insurance licenses. He attended the University of Delaware and graduated with a Bachelor’s degree in Political Science and Criminal Justice in 2019.