Helping You to Manage Risk in a Changing World — Part 1: Understanding Risk Beyond the Headlines

If you’ve watched the markets for any length of time, you know one thing is certain: risk is always part of the story. Headlines highlight the latest concern—interest rates, inflation, global conflicts, political uncertainty—but risk itself is not new. What often gets lost in the noise is that risk comes in many forms, and not all of it looks the same.

At Tanner Wealth, we believe risk management isn’t about eliminating risk altogether. That’s impossible. Instead, it’s about understanding the different types of risk and seeking to be positioned wisely for the long term.

Here are a few key forms of risk every investor should be aware of:

• Market Risk: The ups and downs of the stock and bond markets. Volatility is usually expected, but left unmanaged it can disrupt short-term goals.

• Concentration Risk: When too much of your portfolio is tied up in one stock, sector, or theme. This can sneak in even through indexes, which are increasingly dominated by a handful of large companies.

• Interest Rate Risk: Bonds are not immune to risk—rising rates can lower the value of existing bonds.

• Inflation Risk: Over time, inflation erodes the purchasing power of your money. Playing it too safe with cash or overly conservative investments may put you behind.

• Sequence of Returns Risk: For retirees, the timing of returns matters. Experiencing a downturn early in retirement can have a lasting impact if not planned for.

• Behavioral Risk: Perhaps the most overlooked. Fear and overconfidence can both lead to poor decisions if emotions—not strategy—are driving investment choices.

  
  
  
  

When we think about risk, it may be important to reframe the question. Instead of asking, “How do I avoid risk?” a better question could be: “How do I manage risk so I can stay on course toward my goals?”

Risk management is both an art and a science. It involves using tools like asset allocation and diversification, but also wisdom in knowing when to act—and when to stay patient. Over the next few weeks, we’ll explore practical ways we help clients manage risk in their portfolios--from allocation and diversification, to tax-efficient strategies, to finding balance between growth and preservation.

Because at the end of the day, managing risk isn’t about fear—it’s about freedom. Freedom to live with confidence, knowing your plan is built to help weather the inevitable storms of the market.

By John Tanner, VP | Regional Leader | Wealth AdvisorFI Advisors, Inc.913 N PATTERSON ST VALDOSTA, GA 31601 229-232-8211

Cetera Investors is a marketing name of Cetera Investment Services. Securities and Insurance Products are offered through Cetera Investment Services LLC (doing insurance business in CA as CFG STC Insurance Agency LLC, CA insurance license # 0A96522), member FINRA/SIPC. Advisory services are offered through Cetera Investment Advisers LLC. Cetera is under separate ownership from any other named entity.