The test determined you’re a Hot Shot.
Hot Shots throw caution to the wind. They add risk to their client’s portfolio with the idea that neither they nor their clients want to miss the upside if equities rise. They don’t necessarily disregard the downside, but when markets correct they will blame the market and not the plan. Equities are a good asset class for building long term wealth for the ultra rich, the young, and others who won’t touch their savings for decades. A good argument can be made in their favor, but for the average pre-retiree, that doesn’t want to consider working well past 65 (because of stock market losses), reduced exposure might be best.
Explaining to clients the risk of a stock market based retirement plan puts the onus on them. But remember you’re the expert, they came to you for advice.
Some Hot Shots found their experience during the “go-go” years of the U.S. economy (with younger average age clients) doesn’t translate well in today’s volatile stock scenarios. For these advisors we recommend seeking a mentor who has been through many up and down years and still has the trust of their clients.
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