Asking questions and getting answers is the heart of

Step 4. (step 1,2,3 were described in earlier post)Your financial advisor can assist you in getting information and can provide guidance based on experience and personal knowledge of you and other clients. Remember, the risk/reward tradeoff is yours alone, so how you feel about an investment may be as important as your personal circumstances– especially if you’re already well informed about the investment’s features and the level of return you’ll need to reach your goals.


Bear in mind there is no right or wrong conclusion. If you ask questions such as those in the list below, and then seek the answers with the help of your financial advisor, you’ll be able to compare your alternatives and make a far better educated decision.

Questions to Ask

• What’s my potential return?
• What’s a reasonable holding period?
• What’s my own time horizon?
• What’s the likely fluctuation range?
• How will this investment help achieve my goals?
• What are the chances I’ll need this money during the preferred holding period?
• Are there other/better alternatives?
• What’s the realistic risk that I could lose principal?
• How much fluctuation is acceptable to me?
• How vulnerable is this investment to interest rate changes?
• How stable is the industry?
• What risk control strategies are available to me?
• Which have I used?
• What are my risks if I don’t act?

Related posts:

1. Evaluate the Risk/Reward Tradeoff
2. Make Your Decision
3. Develop Strategies to Control Risks
4. What is Risk?
5. Risk Management
6. Investment Considerations
7. Risk tolerance
8. Are you familiar with your risk tolerance?
9. What Should You Expect From a Financial Advisor?
10. U.S. Bonds – Do not assume unnecessary risk in your portfolio