Broker Check

2022 Year End Reflection

| December 14, 2022
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For me, this past year will be the year another generation learned the meaning of risk when investing in both the capital markets and digital assets.  We all talked about it, knew it was there, but many had never really felt the negative consequences of it.  I have lived through 20 bear markets, this is my 21st, so I have muscle memory on how this works.  The potential for loss is just as real as the potential for gains, and people I talk to know this.  But this year, some people felt it for the first time. You can know something but never really know it until you feel it.   Investors all over the world got a sharp reminder that stocks don’t always go up, loss of capital can mean your hard-earned money just disappears and when we say investing has risks…we mean it.

Risk is the word most associated with investing.  It is also the most feared word about investing.  And after a full year of a down stock market, it is a word now felt about investing.  But when can risk be a positive?  Why do we all take the risk if it can lead to unfavorable outcomes?   Some may say greed, some may say fear, but I say it’s hope.  Hope of a better future. 

In this country, we have a generational knowledge that lack of finances will lead to unfavorable outcomes and a proven path to favorable financial outcomes is through investing.  By taking a risk with our money, we have the potential to earn more dollars than if we took no risk at all.  This concept has been passed down from generation to generation.  Talked about at water coolers since the dawn of the cubical and preached by financial professionals who sell hope for a living.  Hope for a better life for our children.  Hope for an easier life than the daily grind we dread every Monday.  Hope to see the world, reconnect with family, start a business or just have an easier life in general.  I see risk as the necessary step to have potential for gains.  I see risk as being the harbinger of hope.

But do you truly understand the meaning of risk?   Do you know yourself well enough to know where your sweet spot is on the risk/reward pendulum?  I challenge you to understand why you are taking the risk that you are?  What does risk mean to you and is the person helping you make financial decisions have the same definition of risk?  You may fear the risk of losing money, but I can fear the risk of outliving your money.  Your fears are real.  Mine are, too.   The secret is finding the right amount of risk that will allow you to move forward down a path to achieve your financial goals.   Know that risk is not the enemy, not understanding risk and making decisions based on fear is.

 



Kimberly Enders CFP® CWS® CERTIFIED FINANCIAL PLANNER™

Enders Wealth Management

37800 Van Dyke Ave, Suite 125

Sterling Heights MI 48312

www.enderswm.com

 






Securities and advisory services offered through Cetera Advisor Networks LLC, member FINRA/SIPC, a broker-dealer and a Registered Investment Adviser.  Cetera is under separate ownership from any other named entity.  All investing involves risk, involving the possible loss of principal.  There is no assurance that any investment strategy will be successful.

Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER™ certification mark, and the CFP® certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

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