MikeD
Full time employment: Posting here.
I want to convey two things that are difference but almost sound the same and are often confused to our financial guys using their own industry-related terms.
I believe that the following represents our situation:
While we were working, we were 100% in stocks. Now with two years to go until we are both retired we are 45/35/20.
We are 'risk-averse.' I think I have this one nailed. We do not want to take larger chances (riskier) for larger returns. We prefer to have an asset allocation that smooths out the large market fluctuations between bull and bear markets. We want average returns without the risk of large losses or the potential for large gains. We prefer to get a smaller gain without taking the chance that we will have a large loss. I think extremely risk-averse people use an all CD asset allocation for instance. We are not extremely risk-averse. We will accept some risk of loss for an average gain. I think we want a ratio of 45/35/20 to flatten our year-to-year graph.
The other thing that we are, the name-of-the-thing that I am looking for the term for, is: We are willing to tolerate short-term volatility. We don't get all bent out of shape when the market dips one day and recovers the next. We ignore the short-term trends and concentrate on the long-term trend. I think this is often confused with being risk-takers but it is not the same thing.
So what industry term would I use for describing us? I am pretty sure that we are risk-averse and day-to-day and month-to-month volatility-ignorers. What is the phrase for the second one?
Am I right that they are two different things and there are names for them? Do I not know what I am talking about?
Is there a list of frequently used terms here?
Thank you in advance.
I believe that the following represents our situation:
While we were working, we were 100% in stocks. Now with two years to go until we are both retired we are 45/35/20.
We are 'risk-averse.' I think I have this one nailed. We do not want to take larger chances (riskier) for larger returns. We prefer to have an asset allocation that smooths out the large market fluctuations between bull and bear markets. We want average returns without the risk of large losses or the potential for large gains. We prefer to get a smaller gain without taking the chance that we will have a large loss. I think extremely risk-averse people use an all CD asset allocation for instance. We are not extremely risk-averse. We will accept some risk of loss for an average gain. I think we want a ratio of 45/35/20 to flatten our year-to-year graph.
The other thing that we are, the name-of-the-thing that I am looking for the term for, is: We are willing to tolerate short-term volatility. We don't get all bent out of shape when the market dips one day and recovers the next. We ignore the short-term trends and concentrate on the long-term trend. I think this is often confused with being risk-takers but it is not the same thing.
So what industry term would I use for describing us? I am pretty sure that we are risk-averse and day-to-day and month-to-month volatility-ignorers. What is the phrase for the second one?
Am I right that they are two different things and there are names for them? Do I not know what I am talking about?
Is there a list of frequently used terms here?
Thank you in advance.