Poll on Risk taking

[BTravlin]

I think the OP laid out the choices in a straightforward manner. Would you (A) choose the safe path that allows you to maintain the status quo with little risk or (B) choose a more volatile path that could possibly offer much greater rewards.

[ziggy29]

I can't play this game. There are too many contrivances baked into it (i.e. 'all in' to one asset class, age doesn't matter, no mention of whether or not SS and/or pension income would be sufficient, et cetera).

Fortunately this is far enough from a real life decision tree that it's not even a consideration for me (and I'd wager for most investors).

[ERD50]

Quote:

Originally Posted by easysurfer All bonds ~ risk of money not lasting All stocks ~ risk of crash and burn

Where is your evidence of this? - ERD50

[FIRE'd@51]

Quote:

Originally Posted by BTravlin I think the OP laid out the choices in a straightforward manner. Would you (A) choose the safe path that allows you to maintain the status quo with little risk or (B) choose a more volatile path that could possibly offer much greater rewards.

ERD50 laid out the research that seems to clearly indicate that, for the same withdrawal rate, (A) is not only not safe, but dominated by (B)?

[Meadbh]

I voted stocks.

This is not a real life scenario; it represents two extremes, neither of which is optimal in balancing risk and reward, and we all know that. The poll is simply a test of our gut feelings about risk. As such it's a very good poll because the choices are very clear and sitting on the fence is not an option.

I guess I'm an adventurous soul. I'm about to move across the country to a new job and several people have said that I'm "very brave". I don't get it. If you don't take a certain amount of risk, you shrivel up and die.

[Danmar]

Quote:

Originally Posted by chinaco Having other assets to mitigate the risk wasn't the point. You have a pile of money (nothing else) you can invest in one asset class or the other... play it safe or take bigger risk in hopes of gaining more

Not sure what your point is here? Creating an unreasonable choice that doesn't reflect most(all?) people situation? I didn't vote.

[FIRE'd@51]

Quote:

Originally Posted by Meadbh I guess I'm an adventurous soul. I'm about to move across the country to a new job and several people have said that I'm "very brave". I don't get it. If you don't take a certain amount of risk, you shrivel up and die.

Not questioning your decision, but didn't OP's poll specify that you were assumed to be retired?

Edit - Oh, I guess I misunderstood your post the first time I read it. You added the part I bolded to indicate you were a risk-seeker. My apologies.

[East Texas]

I just noticed something. Bonds were pretty far ahead with the early risers. Then stocks started catching up as the night owls got on board. Does this mean early risers are more conservative financially? Must have some hot chocolate and think about this.

[audreyh1]

Quote:

Originally Posted by BTravlin Would you (A) choose the safe path that allows you to maintain the status quo with little risk..

Why do you think option A has little risk? Or even lets you maintain the status quo?

After about 10 years, inflation will start eating your lunch, and you will definitely NOT be maintaining the status quo in terms of cost-of-living. You will have to keep downgrading your lifestyle. And it will get much worse at 20 years and on out.

Audrey

[Meadbh]

Quote:

Originally Posted by East Texas I just noticed something. Bonds were pretty far ahead with the early risers. Then stocks started catching up as the night owls got on board. Does this mean early risers are more conservative financially? Must have some hot chocolate and think about this.

Or the bonds people live on the East Coast.

[REWahoo]

Quote:

Originally Posted by East Texas I just noticed something. Bonds were pretty far ahead with the early risers. Then stocks started catching up as the night owls got on board. Does this mean early risers are more conservative financially?

I think it means there wasn't enough disagreement and debate about the issue so the latecomers wanted to stir things up a bit...

[Rustic23]

Audreyh1
Because that is how he defined it. It does not matter what happens in the real word. For this poll that is what will happen, and that is what the poll is based on. The OP did not say analyze these two investment opportunities and depending on which you think will come true in the future pick one. The first is 100% risk free. You will retire at your present standard of living or slightly above. The other you may or may not. He did not say why, i.e. you picked bad stocks, the market crashed, you picked great stocks, ... nope just there was a risk and reward option. He did not even say how much risk. I believe the OP tried to define a risk that would put your standard of living at risk, ie. not just buy a dollar lottery ticket, in a language most of us would understand.

I chose 1. I would rather have my present standard of living than risk ending up in a soup line. The reward of driving a Rolls Royce is not worth the given risk, I loose my present standard of living.

[ronin]

I can't remember ever participating in one of these polls. Is it because:

A. My memory is shite.
B. I think polls are shite.
C. All the above.
D. None of the above.
E. You don't give a shite.

[Moemg]

I voted stocks but frankly in real life I would never go all stocks . A lot heavier in stocks yes but not 100% . I learned my lesson in the last melt down.

[haha]

Before I could choose I would need to know gamma, delta, last week's closing VIX and yesterday's 12:01 am temperature at Port Alberni.

With these data my answer would be clear.

Ha

[East Texas]

Quote:

Originally Posted by Meadbh Or the bonds people live on the East Coast.

Then can one assume the right coast is conservative while the left coast leans more to the ...... left?

[FIRE'd@51]

Quote:

Originally Posted by Rustic23 Because that is how he defined it. It does not matter what happens in the real word. For this poll that is what will happen, and that is what the poll is based on. The OP did not say analyze these two investment opportunities and depending on which you think will come true in the future pick one. The first is 100% risk free.

I sure didn't read OP's definition that way. What he posted about 100% bonds was:


1) Invest all of it in Ultra-safe Bonds with a realistic chance of making a little over inflation.


This is not 100% risk-free with respect to not running out of money. To me this statement leaves open the possibility of not keeping up with inflation.

[Nova]

Quote:

Originally Posted by East Texas I just noticed something. Bonds were pretty far ahead with the early risers. Then stocks started catching up as the night owls got on board. Does this mean early risers are more conservative financially? Must have some hot chocolate and think about this.

I was an early poster...insomnia...sigh. I took the poll at face value; there are two choices (risk taker or non-risk taker); care to play?! It's sort of like flipping a coin (agreeing to play), then crying foul when the coin is either "heads" or "tails". There's only two choices. Some people chose to not flip that coin, noting that neither outcome was reasonable.

If the poll had a third option of some combination of bonds and stocks, who wouldn't have selected that? With most people selecting the option of a combination of stocks and bonds, there would have been no basis of judging risk.

If it were my poll, I would only have bonds or stock to choose from, too. I would also include some questions to identify approximate age and whether the voter has/will have a pension of some sort (excluding SS) of if they have/will have only their assets to rely on.

[NW-Bound]

Tough two choices. I did not vote.

There should have been a 3rd one: Keep on working.

[Rustic23]

I took 'a little over inflation' as meaning it would make inflation thus cover your current expenses and thus 100% with a small chance of doing better. Never did it say 'not covering inflation'. I am beginning to see why new bills in congress are 2,000 pages long. In order to ask a simple question 'are you risk adverse' you have to write a novel to explain the question. Me thinks, too many of us have too much time on our hands, maybe it will get better when it warms up out.