42 – Interview with Mitch Mitchell of Riskalyze

Christian Financial Perspectives

English - July 09, 2019 00:15 - 34 minutes - 48 MB - ★★★★★ - 11 ratings
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Previous Episode: 41 – From FOMO to JOMO

Next Episode: 43 – Planning For What Ifs And Whens

In this episode, we want to introduce you to a tool that will help you choose peace over worry when it comes to your investments called Riskalyze®. Riskalyze® is a financial technology company that provides software for analyzing investment risk and building and implementing investment portfolios. Bob and Mary Jo interview special guest, Mitch Mitchell, who is the Customer Success Manager for Riskalyze® to give a complete breakdown of this piece of technology, how it works, and how you can use it.

Click below to listen to Episode 42 – Interview with Mitch Mitchell of Riskalyze®

Interview with Mitch Mitchell of Riskalyze®

Learn about the amazing risk investment portfolio platform, Riskalyze®.

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We fear volatility when it comes to investing because we think it automatically means losses. However, volatility is a natural part of investing. The higher the volatility, then the higher the possible return, and the lower the volatility, the lower the return.

It’s the same way with everything else in life. The faster you drive the more risk or volatility you can have, but many are willing to take that chance to arrive at their destination sooner.

Click the button below for your free portfolio risk analysis.

GUESTS: Mitch Mitchell, Customer Success Team Manager at Riskalyze®

HOSTED BY: Bob Barber, CWS® and Mary Jo Lyons, CFP®

Mentioned In This Episode

Christian Financial Advisors

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Bob Barber, CWS®, CKA®

Mary Jo Lyons, CFP®, CKA®

Riskalyze®

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Linkedin

Mitch Mitchell

Daniel Kahneman – Behavioral Economics

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EPISODE TRANSCRIPT

[INTRO]

BOB:

Welcome to Christian Financial Perspectives, a weekly program where we talk about ways to integrate your faith with your finances. This is Bob Barber.

MJ:

This is Mary Jo Lyons.

Bob:

Are you ready to learn the truth about money from a biblical perspective?

MJ:

Join us as we discuss what God’s Word says about money and integrating your faith with your finances… If it’s your first time listening, welcome to the program. If you’re a returning listener, welcome back.

[EPISODE]

BOB:

Matthew 6:26-27 “Look at the birds of the air; they do not sow or reap or store away in barns, and yet your heavenly Father feeds them. Are you not much more valuable than they are? Can any one of you by worrying can add a single hour to your life?”

MJ: Today on Christian Financial Perspectives, we will be talking about taking the fear and worry out of investing.

BOB:

Many advisors will tell you that the key to investment success is managing risk and diversifying accordingly. You can learn more about diversification on episode 28 titled: Diversification – What it really means. I believe that managing your fears and worries is just as important. After all, no one likes losing sleep over worrying, especially about the markets.

MJ:

Bob, if it were only that easy, I don’t think it’s truly possible to take the fear out of investing, but we’re going to talk about managing risk today, both our own individual risk and the inherent risk of your portfolio, for example. I think when we look at risk and managing that according to our own personal situation, it can really help ease that fear, but I’m not if we’re ever going to take the fear completely out of investing. And rightfully so, it is risky!

BOB:

That’s the truth. So, while you’re listening to our podcast, we have a very special guest that will be speaking with us in just a few minutes – Mitch Mitchell from Riskalyze.

Mary Jo, investors are much more likely to fear losses than they are to celebrate the gains in their portfolios. I always see that. You know, I notice this because we never seem to get the emails or phone calls as long as their investments are going up in their portfolios. When it goes down for a few days or a few weeks and they get that monthly statement, the phone rings and the emails start coming in. Why is that? Why do you think that it?

MJ:

Well, analogies are a great way to tell a simple story. I look at it like a bee sting, we may not have ever been stung ourselves, but we know it’s going to hurt so we avoid bees. A lot of us do the same thing with our investment portfolios, if that makes any sense.

BOB:

It seems like we fear volatility more than anything in our investment portfolios. We think that volatility means losses just because the portfolio goes up or down. People will call and say, “I’ve lost this much money.” I said, “Well, we didn’t sell.”

MJ:

That’s right. It’s not a loss until it’s on paper.

BOB:

Exactly. Volatility is a natural part of investing. I’ve noticed over the years that the higher the volatility, the higher the possible return, and the lower the volatility, the lower the return. If you don’t want volatility, then go to a more conservative investing, but with lower volatility come lower returns. It’s the same way with everything else in life. The faster you drive down the highway, the more risky it is, but we’re willing to take those risks to arrive at our destination sooner. We’re going to Colorado in a couple of weeks. If I drive 35 mph, it’s going to take me a long time to get there, but if I drive 75 mph, which is the speed limit by the way. I’m not going over the speed limit, but if I drive faster then I am going to get to the destination sooner, but there is a risk of driving faster.

MJ:

Bob, as you were talking, something came to my mind. It’s the analogy that I use with clients all the time. When you’re in the grocery store and you’re in one line, and you think that checker is going to be faster. Then, they get bogged down all with a price check or whatever so you jump over to the other line. The same thing happens. Another person forgot their wallet or whatever, and you’re even further behind than you were before you changed lines. The same thing happens when you’re driving. You’re at the stop light…I think this might be a guy thing, but that’s another podcast [laughs].

BOB:

I think it is. We’re going to get in the right lane, that’s right.

MJ:

You’re always trying to find that lane that’s the fastest, but the reality is that you’re all going to get there at the same time. You;re not going to improve your situation by switching from lane to lane. Oftentimes, you’re going to hurt your situation. The same is true with investing.

As advisors, we talk a lot with our clients about understanding their risk tolerance. We ask a lot questions. We drill down to see how they’re going to react to volatile markets and what kind of returns they expect on their portfolio, how much downside they can stomach in a down market, what’s going to keep them up at night. That’s how we try to figure out what is the most appropriate investment for them.

In the past, we’ve always done this using percentages. It’s made sense to us because we talk about the market in percentages. We talk about returns as percentages. It’s just kind of in our DNA and how we were trained. But, when it comes to our clients, I don’t think those percentages actually resonate so much. It was our best guess as to what percentage of stocks and what percentage of bonds was appropriate based on how they answered our questions. But, you know, I just don’t think when you tell a client that they should be in 60% stocks and 40% bonds that the majority of them actually know what that means.

BOB:

You’re right. We would also use generalizations for a long time that if you’re a young investor, you can handle more risk. If you’re retired, you didn’t have the time to make up for losses so you should be conservative, but this approach is truly outdated. It doesn’t consider that each investor’s personality is different, as well as their tolerance for risk. Every person is unique, they have their own emotional history, per se, and their own unique circumstances.

MJ:

Absolutely. In preparing for this week’s podcast, I’ve been thinking a lot about risk and how it impacts our listeners. I was recently reading an article and came upon this, “The more I intentionally choose peace instead of worry, the more I experience God’s blessings right now.”

BOB:

Say that one more time and really emphasize that.

MJ:

“The more I intentionally choose peace instead of worry, the more I experience God’s blessings right now.” I’m trying to get my husband to see that, but he’s not quite on board yet. He’s a worrier. [LAUGHS]

BOB:

[LAUGHS] We’re always talking about Mike. One of these days, we need to have MIke on the program because we’re always picking on him. Everyone is going, “Who is this Mike guy?” This Mike guy is a really nice guy, though, y’all.

MJ:

We’re going to have to start talking about Rachael once in awhile.

BOB:

Exactly. Yeah.

MJ:

So, when it comes to your investments, we know a lot of our listeners are prone to worry. How can you find peace with the right mix of investments – one that allows for growth but won’t keep you up at night?

BOB:

Today,we want to introduce you to a tool that will help you choose peace over worry when it comes to your investments, and it’s called Riskalyze. So remember that – Riskalyze – and today we have a special quest that will be joining us right now, Mitch Mitchell. Hey, that’s kind of a double name, isn’t it?

MITCH:

It is. Thanks for having me. It’s an honor to be here.

BOB:

Mitch is a Customer Service Manager with Riskalyze, which is a financial technology company that we use that provides software for analyzing investment risk and building and implementing investment portfolios.

Welcome, Mitch!

MITCH:

Thank you so much for having me.

MJ:

So Mitch, I think your title is actually a customer success manager. We all want success in our lives, so what exactly does that mean?

A customer success manager is specifically focused on the success of the customer. I recently went to Pulse, which is the largest customer success conference in the country. It’s put on my Gainsight.

MJ:

I’ve read about that

MITCH:

Yeah. It’s a customer success software. I changed my elevator pitch for Riskalyze while I was there because other customer success managers were there and they wanted to know what Riskalyze was. So, I said, well, it’s a customer success platform for financial advisors, and they all went, “oh, oh.” They all kind of understood that.

Another way to put Riskalyze is that it is a risk alignment tool, which is another oversimplified way of saying it, which isn’t quite as interesting as the story behind it.

MJ:

Speaking of the story behind it, why don’t you share that with our listeners. Give us a little background on how Riskalyze was created.

MITCH:

Absolutely. So, the investing world is broken, and it’s a rather inflammatory way to start that story. The founders of Riskalyze realized this. The way they realized this is that it was broken for a number of reasons. One of which you have already discussed earlier, which is we sort of stereotype people based on their age. But, there are plenty of younger investors that watched their parents go through 2008, and they’re extremely conservative – very risk averse. There are other folks that are already retired and you think would need to be more conservative with their money, but they would much rather go to Vegas with their money. So, you can’t really stereotype people by their age.

MJ:

So true.

BOB:

Riskalyze really helps people. How does it help them with their investing.

MITCH:

So, Riskalyze was built around some nobel prize winning research called prospect theory, and it won the nobel prize back in 2002. That was by Daniel Kahneman. To grossly oversimplify his research, he basically walked around various cities around the world with a pocket full of ten dollar bills and a coin. He would stop people and ask, “Hey, I would like to bet my ten dollars afgainst your ten dollars. Let’s play a little game. We can play this game as many times as you want. We’ll flip this coin. Heads, you get my ten dollars. Tails, I get your ten dollars.”

Nobody would take this bet. So he would up the ante. “Okay, how about my eleven dollars versus your ten,” and no one would take it. “Okay, how about my twelve dollars versus your ten? Bear in mind, we can play this over and over again.” No one would take it. What he was able to do by repeating this is he was able to empirically and objectively measure just how much people hate losing more than they love winning. Let me say that again. He was able to objectively and empirically measure just how much human beings hate losing more than they love winning. That is the kind of fear that drives people away from investing. They fear losing what they have more than they would love growing what they have.

MJ:

Yet, they go to Vegas all the time, and we know the house is always going to win.

MITCH:

Absolutely. That I can explain in a much more complex study of psychology, but I don’t think we have the time to go into that right now. The interesting thing about investments is that they are a little bit more long term. People don’t think of them as fun. They think of them as something that they have to do in order to succeed, but they also see the risk in the market. Now, what’s interesting about the coin toss analogy, if they continued to play over and over and over again, even with just a ten percent better side on Kahneman’s part. They would continue to grow and win. Even if they lost their ten dollars, they would earn back eleven. Then, they would lose ten and earn back eleven again. Thing is, people wouldn’t start taking the bet until he was putting up on average twenty five of his dollars against their own. He was able to empirically measure that human beings hate losing 2.5x more than they love winning.

BOB:

I think this is something that I would like to try with people. I’m going to go get myself a bunch of quarters.

MITCH:

[LAUGHS] Absolutely. It;s a fun experiment. He got a lot of his students to chip in on the experiment for the research as well. But I digress, the real problem here is that because people hate losing more than they love winning, they tend to make fear based, short term, bad decisions. Never underestimate the ability of human beings to sabotage their long term well being based on short term decisions that they make out of fear.

So, one of the ways that we help people and advisors is that we help advisors objectively measure, empirically, in the same way Kahneman did, just how risk averse various investors really are. We put a score, given to that client based on a Riskalyze questionnaire, that e,piraclly measures just how much they are willing to risk losing in the short term in order to make sure that they can grow their investments in the long term.

One piffy way that our founders have put that recently is “helping investors to invest wisely for the long term making good long term decisions one good, short term decision at a time.”

BOB:

That’s a good saying. That’s a really good saying. Okay, say that one more time.

MITCH:

helping investors to invest wisely for the long term making good long term decisions one good, short term decision at a time. I work for some very smart people [LAUGHS].

So, what this questionnaire does is help to quantify the potential loss tolerance of the investors. I loved your speed limit analogy that you said earlier necause you are going to get to your destination a lot more quickly iof you are traveling at 75 mph. The risk of course, there, is that if you experience a crash at 75mph, it’s going to hurt a lot more than if you experience a crash at 35 mph. On the other side of that coin, however, if you’re driving at 35 mph, the risk that you’re taking is that you might not arrive to your destination on time, and you could miss the event that you’re headed to.

MJ:

I like the way that the specific numbers in the speed limit sign can help to quantify the loss. It just takes a more accurate perspective and picture than an actual percentage. People can relate better to concrete numbers rather than an abstract percentage, and I think it’s really smart of Riskalyze to put it this way.

MITCH:

You’re already beating me to my punchline. The two big problems, of course, being stereotyping and not being able to objectively measure how much somebody can tolerate losing has basically inspired the very concept of the risk number, which is actually meant to look like a speed limit sign for that exact reason. Imagine you’re driving down the road and you pass a speed limit sign that says “Conservative”. How fast are you going to drive? Or imagine driving down the road and passing a speed limit sign that says “Moderate” or “Aggressive”. How fast are you going to drive?

If your passenger in this analogy is your client, is their definition of conservative or aggressive going to match yours?

MJ:

Oh, interesting.

BOB:

We show our clients all of our different portfolios, and it has the speed limit numbers added to it now. Then, we can break down the portfolio and show them the asset allocations and how all of the holdings within them also have speed limit signs to them. You can watch their eyes just light up because they’ve never thought about it that way before. Oh, the aggressive growth – because you know – our aggressive growth comes in about 75, where our conservative growth comes in as low as about 25 mph. That’s the way it looks on the speed limit sign, so it’s emotional support to them because they do know, the slower I drive, the safer I’m going to be, but I’m also not going to get to my destination as fast, like you said.

Now, to get to these speed limit signs and where does somebody fit – in other words, where do they feel comfortable. Do they feel comfortable driving 75 or do they feel more comfortable at 55 or 25. There’s a whole lot of questions that you ask, and there’s a theory behind these questions. It’s hard because the questions seem so similar as you are going through them. Can you tell what the theory behind all of these different questions are and how it works coming at an arrival of where their risk tolerance is?

MITCH:

Absolutely. So, the risk questionnaire, which actually assigns that objective and empirically derived risk number to the client, actually comes from the exact same experiment that Daniel Kahnemans was running for Prospect Theory. So, you may notice that a lot of those questions seem pretty similar – one right after the other, and that is because it is very similar to the act of flipping a coin over and over and over again. We are asking the human brain here to really zero in objectively on where their risk tolerance really is. Risk Tolerance being defined as how much risk they are willing to take on in order to achieve their goals.

So, the risk questionnaire sort of gives them two options: here’s how much you said you are willing to risk losing, and then it will attempt to, shall I say, tempt them away from that number either by offering them more reward or the same amount of reward but at less risk. It will repeat that question over and over again. Trying to make sure that they can zero in from a range to a point in order to determine what their risk tolerance is. So, if it’s able to tempt them to a higher amount of risk by offering more reward, they weren’t really that committed to their risk aversion, and that might actually surprise them when they see the dollars and cents of how much reward they could get by taking on more risk, you might find out that they are actually much more risk tolerant than they initially thought. They were only thinking about the risk before, they weren’t thinking about the long term rewards.

Conversely, if they decide to take on this same amount of reward, but they say, “Ooh, I can get that same amount of reward for less risk”, then it turns out that they may be even more risk averse than they initially thought, and they were actually only looking the potential upside that they were going for. They were more goals oriented than they were risk oriented. That could have been very dangerous for them in the long run if they had experienced more loss than they expected, and that’s dangerous for everyone involved in that relationship.

So, this particular questionnaire really zeroes in on what their true risk tolerance is and then assigns to them an objective risk number that sets the speed limit for the advisor so that they can, get this, assign a portfolio to the particular client that is measured in the exact same way and matches their speed limit without exceeding it, point for point.

BOB:

What we are talking about is taking this test. It’s just like, what, the simple one is like 5 questions?

MITCH:

If you tried really hard, you could probably stretch it out to ten minutes long.

BOB:

Yeah, exactly. By the way, if you would like to take that risk test, we are putting a link on the Christian Financial Perspectives website. You can go to ChristianFinancialPodcast.com and go to today’s episode called “Riskalyze”, and you’ll see a link to take that test for your risk. We have that test that we do with our clients here at Christian Financial Advisors and then we ahve the portfolio that they’ve picked in the past. The portfolio might say it’s 64, but they may come in at 70 so they can handle a little more risk. Or, 64 and maybe their risk test comes in at 50, which means that we need to lower the amount of risk in the portfolio. It’s interesting, isn’t it Mitch and Mary Jo, that the longer we have bull markets, everyone always wants to have more risk in a bull market, but once the bear market starts, everybody’s risk goes down.

MJ:

Oh, yes.

MITCH:

That is, unfortunately, the very reason as to why so many investors just completely shoot themselves in the foot and really damage their own future. It’s based on fear – those same short term, fear based decisions. We’ve noticed, psychologically speaking, that investors will, by no fault of their own, will buy high and sell low and repeat until they’re broke.

So, that’s a lot of the fear that drives it, but that’s exactly why Riskalyze was made. People will sabotage their own future based on fear. Riskalyze helps them to understand the risks of their portfolio and understand what their own risk tolerance is, and make sure that they are invested in a portfolio that they can be comfortable with for the long term. If they understand the risk they are taking on, it’s not as scary anymore, and that empowers them to stay invested even when the market has a downturn and make sure that they can achieve their goals for the long term.

BOB:

But when a market’s been up for a long, long time, Mitch, they all want to be aggressive, but when you take this risk score, it shows them how much it can go down, especially in a 2008 or similar type situation.

MITCH:

Absolutely, and playing those “what if” games with clients is a tricky business, and it’s especially difficult to do so objectively, but that’s another thing that Riskalyze can help with. There are several features of Riskalyze like our “Stress Test” feature, which allows them to compare the current portfolio or a proposal to the market environments of 2008 or 2013 and say, “What would this portfolio do if another 2008 happened?”

If a portfolio has a risk number in the 30’s or 40’s, it’s not invested as aggressively as the SEP 500 or a similar portfolio to that. It cuts down on a lot of panicked phone calls if all the sudden a market experiences a downturn, and your client calls up and says, “Oh my goodness, the market is down so many points.”

You can say, “Yes. We talked about this. I showed you the stress test. I showed you that your portfolio has a risk number in the 40’s, where the SEP 500 has a risk number in the 70’s. Lo and behold, you’re not going to miss as much money as the rest of the market. When it has another upturn, you’re going to be right back on track, having lost very little compared to the rest of the market.”

MJ:

So, Mitch. Riskalyze has the ability to model scenarios. Is that what you were describing or does it do that differently? How does that feature work?

MITCH:

That is a separate feature, actually. Scenarios is a beautiful feature as well. That’s another “what if” game that you can play. The stress test is more future looking. It compares the portfolio’s current, basically, health history going all the way back and what would happen if another 2008 market were to happen again.

Scenarios is rear facing, but if you look back, you can choose specific dates to see what your particular portfolio’s performance would have been during those dates. Actually, what is was during those dates and then compare that to other significant market environments. Say, if oil experienced a huge downturn, you could come up with a pretty good argument as to what your particular portfolio would do if oil tanked.

BOB:

So when reviewing a current client’s portfolio for its current risk level level using Riskalyze, there’s a heatmap approach. What does this heatmap do?

MITCH:

That is absolutely one of my favorite visuals in Riskalyze. The first thing that everybody notices is a bunch of red and green bars appear on the screen, but I like to direct their attention to the left side of the screen, where all of a sudden it assigns an individual risk number to every single investment in the portfolio. After that, is shows basically a 95% probability range for every single investment (that’s the red and green bars) that scales based on the percent allocation and the actual volatility of that investment. The more volatile, the higher the risk number and the wider the red and green bars. It’s also weighted for the percent allocation of that particular holding, but that’s not the best part of that feature. The best feature is the yellow bar, which can be found on the far end of the red bar, and that represents diversification, which you were talking about before. There’s some complex math going under the hood of Riskalyze, which we call the anti correlation coefficient matrix, which is so much fun to say [LAUGHS].

BOB:

Oh yeah, boy. We just lost somebody on that one!

MITCH:

Well, I’m a theater kid that spent some time working in medicine and now I’m a finance technologist, so if I can learn it, anyone can. Any client, whether they’re an artist or a writer otherwise, can learn what anti correlation coefficient means and what that does for diversification. Basically, we take mathematical correlation of when this holding goes up, the other holding goes up, and when this goes up, the other one goes down. When they move against each other like that, that’s inverse correlation, or anti correlation.

We can assign a coefficient to show measure just how differently they move and when they move opposite of one another, that’s actually good. That actually creates, sort of, an inverse movement in your portfolio, minimizing the risk. So, you can have an extremely mathematically efficient portfolio that maximizes the reward and minimizes the risk through diversification. That yellow bar shrinks the size of the red bar, basically showing how much risk has been minimized. That red bar would have stretched all the way to the left side of the yellow bar, but now it doesn’t, which is why you can have portfolios that have significantly higher rewards than they have risks in that 95% probability range.

BOB:

This is why we want you to go online and take this test so we can show you all of this in color. Once you see it in color, it makes a big difference. You’re just hearing it now, but to see it really makes it come alive. Because I tell you, this is one of the most exciting things that we have done in my 25 years of investing. Riskalyze is really helping clients to understand the risk of the portfolio overall and the different risk of the investments that actually make up the portfolio. It really comes down to, what we call, “Behavioral Finance”. It’s helping to take the emotion out of your decisions and replacing that with logic. Behavioral Finance is the study of the influence of psychology and the behavior on investors. It really can affect how the markets react as well. It focuses on the fact that investors are not always rational, and they have limits to their self control and they can be influenced by their own biases. I’ve heard the saying for years that the markets can be irrational a lot longer than we as humans can be rational.

MJ:

You know, we did an entire podcast on this. In fact it was episode 13 on the emotional investor. You can find this in the library of previous episodes on christianfinancialpodcast.com

So Mitch, how does Riskalyze address or handle this emotional behavior we’ve been talking about of the individual investor?

MITCH:

Well, the emotions play an extremely powerful role into the decision making process for all human beings. Our limbic system is largely controlled by our frontal lobe, but I don’t know if you guys have sons or teenagers that might have experienced a slightly longer development of the 26 years to get that frontal lobe.

[ALL LAUGHING]

BOB:

[LAUGHS] Yes.

MJ:

Bob has 3 daughters, so he’s pretty familiar with it

MITCH:

My dear mother used to rub my forehead and say, “When you’re 26, boy. When you’re 26.”

It certainly is important to understand just how powerful emotions are on our decision making process, but when we understand our emotions, when we understand what we are afraid of, when we understand our fears, suddenly they don’t have as much power over us. That is what is the real magic of Riskalyze is it’s helping investors to understand what their fears are, and then to understand their investments in a way that helps them to understand the risk that they are taking on.

In the parable of the talents that Jesus talked about, we see the 10 talents and the 5 talents. Which one of the servants was the one that the master rebuked? The one who went and buried that talent.

BOB:

Right. The one with the 1 talent.

MITCH:

Exactly. But what was the solution that the master said. He said, “You should have invested it.” But why? Why did that servant not invest that one talent?

BOB:

He was scared

MJ:

He was afraid to lose it

MITCH:

Exactly, but we can’t let fear hold us back from being good stewards of not just money, but our lives and the lives around us and the legacies that we pass on.

BOB:

That’s right.

MITCH:

So if Riskalyze helps you to understand what you are afraid of, which is the risk of losing and the likelihood of it and can help you make the most well informed decision possible about what kind of investments you should be investing in, it can truly help you to grow what you have and be a good steward of that. That is really what Riskalyze is all about – teaching the world to invest fearlessly, not empowering the world to invest well. If you invest fearlessly, that’s a given.

MJ:

Awesome. Amen. That’s what we’re really trying to help our clients with. This is a fairly new tool for us, and we have become very excited about it. Bob, I know that you have some favorite features that you have worked with clients recently. Do you want to talk about that a little bit.

BOB:

Yes, there’s basically three things that I really like. They can see in real numbers, not just percentages the amount that their portfolio could decline in a down or bear market. Because, you know, Mary Jo, they’ll say, “I’m good being down 3-4%.” Well, we had a client come in the other day who has 2.1 million, and being down 4% is $80,000, and that just blew his mind. It freaked him out. So, he can’t even tolerate being down 4%.

You know, someone with $20,000, 4% is $800, so there’s a big difference in the higher those numbers get. What I’m really seeing is that when people take this risk test, depending on how much money they have, they realize dollar amounts. That’s making a big, big difference. They truly gain an understanding of the monetary risk, not just the percentage risk, with all of the different portfolios that they can choose from ultra conservative to conservative to moderate to growth to aggressive growth. They know how that risk plays or doesn’t have to play when meeting their financial goals.

MJ:

We are just so excited to have this tool. We feel like it’s a real blessing to us. It really helps us address this ingoing, challenge that we’ve always had with clients and making sure that we are targeting the appropriate risk tolerance. The more this market continues to be volatile, the more that is so important.

As we wrap up today’s show, I wanted to share the advantage to managing risk this way: It allows you to stay invested, to follow your advisors advice, and avoid emotional reactions to market volatility. When we do this, investors are far more likely to achieve their long term investment goals – to buy low and sell high instead of buying high and selling low.

BOB:

So as we come to the end of today’s podcast, Mitch, we want to thank you for your time, for being on Christian Financial Perspectives, for telling about all of the ins and outs and how Riskalyze was developed, and how it can help people so much when it comes to investing. Thank you, Mitch!

MITCH:

Thank you so much for having me. I had a blast.

BOB:

There’s a couple of questions we want to ask you as we come to the end, do you know what your risk score is?

MITCH:

[INTERRUPTING] Yes, in fact, mine is 53.

BOB:

Oh, yours is a 53. [STARTS TO LAUGH]

MITCH:

Oh wait, wait, wait. That question wasn’t directed at me; [EVERYONE LAUGHING] that was directed at your listeners.

MJ:

Mine is 74

BOB:

So yours is a 53. Mary Jo’s is a 74. Mine is an 88…oh wow, and I think Nathaniel’s is even higher. I’ve been through this business for over 33 years, and I’ve been through all of these ups and downs. I realize, so many times, it’s just volatility, so I’ve learned to take it. That’s probably why my risk score is higher because I have seen it all.

But, do you know the risk of your actual investments are and how they compare? Is it inline with what your goals are? If you would like to learn more, give Mary Jo or I a call at Christian Financial Advisors today. We’re also including a link on the Christian Financial Perspectives, our podcast website which is christianfinancialpodcast.com, so you can take the riskalize test, or you can go to our Christian Financial Advisors Website. We will have the links on both of those websites so you can take that test. We encourage those that are investors to learn what your risk number is.

That’s going to do it today on Christian Financial Perspectives as we finish up on Riskalyze.

[CONCLUSION]

You’re listening to Christian Financial Perspectives. Join us next week as we explore what God’s word says about money. Don’t forget, you can sign up for our free newsletter on ciswealht.com or give us a call at 877-71-TRUTH. That’s 877-718-7884. To make sure that you don’t miss any of our podcasts regarding the truth about money, make sure to subscribe to Christian Financial Perspectives at christianfinancialpodcast.com for free. If there are any specific topics you would like to hear more about, we would love to hear from you.

That’s all for now, until next week!

[DISCLOSURES]

Asset allocation, which is driven by complex mathematical models, should not be confused with the much simpler concept of diversification. Asset allocation mitigates risk, it does not guarantee future performance. A diversified portfolio does not assure a profit or protect against loss in a declining market. All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful.

Mitch Mitchell and Riskalyze are not affiliated with Christian Financial Advisors. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the hosts, Bob Barber and Mary Jo Lyons. Bob and Mary Jo do not provide tax advice and encourage you to seek guidance from a tax professional.Investment advisory services offered through Christian Investment Advisors Inc. DBA Christian Financial Advisors, a registered investment advisor.

42 – Interview with Mitch Mitchell of Riskalyze

Christian Financial Perspectives

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