Most of the time we discuss the risk (or uncertainty) individuals take when building their portfolios. Some clients have life experiences that lead them to a very conservative portfolio. Other clients don’t want to take risk AT ALL!
We may not immediately think about it, but there is also a cost of NOT investing. For the person that wants to put all their assets in cash, the risk is a loss of purchasing power over time. As investors, we usually HAVE to take some amount of risk to offset inflation. Failure to beat inflation with your investments means that your future portfolio will buy less than it does today!
Successful investing is about balancing the need to beat inflation while also creating a portfolio you can stick with even during volatile times.