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Your Greatest Risk may be Your Own Behavior

By Portage County Business Council

By LouAnn Schulfer,  AWMA®, AIF®
Accredited Wealth Management Advisor®
Accredited Investment Fiduciary

What do you think of when you hear the word “Risk”?  When I ask that question to a client or prospective client, the answer is usually market losses in an investment.  Certainly that is one type of risk.  There are, however, many other types of risks that have to do with your financial well-being that we consider.  Inflation risk.  Liquidity risk.  Financial emergencies.  Unexpected death or disability of an income earner.  A long-term care need for a family member.  Overspending.  Excessive taxation.  IRS rules.  Missed opportunities.  Too many eggs in one basket.  The list could go on and on.  But what about your own behavior?  Sometimes your own actions or inactions can be your greatest risk of all.  Here are just a few examples.

Procrastination.  I’ve worked with people who we complete the planning step for, but they do not take action.  Logically, things make sense but emotionally, something holds them back.  Likely, it’s fear of change.  The irony is, the only constant IS change.  The world and our circumstances around us will evolve regardless of whether we choose to adapt and move forward.

Irrational decisions.  Planning encompasses short-term, mid-term and long-term goals.  We organize investments into their intended time frames and gauge our expectations accordingly.  If you plant a tomato seed, care for the tiny shoot, watch it daily and in four or so weeks it is still not delivering abundant fruit, do you yank it out and plant something different?  What would happen by late summer if you kept repeating that behavior?  The same can be true with your investments.

Assessing risks.  Recently, I’ve had conversations with a few different people who keep large amounts of cash in their home.  They fear losing the money and feel they have greater control of the cash in their basement.  Weigh that against just one other option:  placing the money in an FDIC insured account or investment with principal protection.   The Federal Deposit Insurance Corporation is a United States government corporation that provides deposit insurance to depositors in U.S. commercial banks and savings institutions.  If the financial institution that you’d placed the money with fails, FDIC insurance kicks in, subject to current limits of $250,000 per depositor per bank. Conversely, two of the greatest risks of keeping the money in your home would be theft of the cash or destruction of your home from fire, tornado, etc.  Which is the greater risk?

Understand that there are many forms of risk.  Sometimes, your own behavior can be your greatest of them all.

LouAnn Schulfer is co-owner of Schulfer & Associates, LLC Wealth Management and can be reached at (715) 343-9600 or

Securities and advisory services offered through LPL Financial, a Registered Investment Advisor.  Member FINRA/SIPC.