Measuring Client Risk Tolerance: Psychometrics Versus Revealed Preferences

Last month a war (of sorts) was declared, pitting various risk tolerance companies against each other with respect to their methodologies relating to portfolio risk assessment and analysis. The dispute appeared to be outside the realm of measuring a client’s appetite for risk, so to speak. However, there is a very real and clear line[…]

Wise Pace & DataPoints

Wise Pace: DataPoints in Action

When working to achieve financial goals, having a guide can be critical, especially when our patterns of financial choices need some enhancing. Working with a financial coach can improve how we make money-related decisions before working on a financial plan or investment strategy. See how Wise Pace, a financial coaching and planning firm in Atlanta,[…]

Communicating During Chaos: Talking To The Public

Like economics, financial planning, or psychology, there is a science to communication. Research-backed methods exist for sharing information with others, particularly in times of chaos or a crisis. As many of you probably have experienced during preceding days, there are excellent examples of letters, email messages, and social media posts that are both informative and comforting.[…]

Is Your Risk Tolerance Assessment A Cosmo Test?

If you have ever taken a quiz entitled “How to tell if your boyfriend is cheating on you” or “Answer these five questions to learn to see if you’re a good friend,” then you’ve probably taken something akin to what we call a “Cosmo test.” Your answers to just a few questions will result in[…]

Gambling With the Assessment of Risk Tolerance

In his “Intelligent Investor” column in the September 7, 2019 print edition of the Wall Street Journal, Jason Zweig wrote about an idea that we’ve thought about a good deal in the recent past: the fact that not all risk tolerance assessments are created equal. In the piece, Mr. Zweig—himself an accomplished and noted author[…]